The High Cost of Having Children

Because my wife I do not have children, I feel that it’s important to bring in outside voices to talk about money and kids. This is a guest post from Cathy, who writes about family finances, parenting, and cooking at Chief Family Officer.

I would never in a million years want to give up my children just because they cost too much. But recently, the cost of having children hit home as I was reading J.D.’s post about the “third stage” of personal finance, which comes after one has mastered the fundamentals of living frugally, saving, and pursuing financial goals.

I have to admit: I grew a little envious reading that J.D. was beginning this third stage. I still consider myself to be firmly entrenched in the second stage — and I’ve been in this stage for years already, and will continue to remain in it for the foreseeable future.

And I realized that it’s because I have kids. J.D. doesn’t. Now that he’s paid off his non-mortgage debt and begun saving, he can think about grander things.

If my husband and I didn’t have children — if we didn’t have to provide for them now or worry about providing for them in the future — our non-mortgage debt would be completely paid off, we’d be paying a lot extra on the mortgage, and maxing out our retirement contributions, all while still having a comfortable amount left over as spending money.

We have greater expenses in the form of childcare, clothing, medical needs, and life insurance premiums.

I see us balancing saving for retirement and saving for college (and/or paying for private school) for the next 20 years. If we didn’t have kids and didn’t have to perform this balancing act, I think we’d be making reservations for an Alaskan cruise right about now!

I do not regret having children. You could never put a price on the intangible privilege of bringing new life into this world, the joy they bring into my life, or the way they make me a better person. I wouldn’t change a single thing about my life.

My point is simply that this is the kind of financial ramification I didn’t think about before my children were born. Sure, I knew kids were expensive. But if I’d realized how much harder reaching the third stage of personal finance would be after having kids, I think I would have been even more diligent about paying off our loans and building up savings first.

In fairness to myself, I don’t think that I could have fully realized or appreciated the financial impact of having one child — let alone two. At the moment, each child costs us about $800 per month. That’s the total amount for childcare, health insurance, and the additional life insurance policies that we took out when they were born. That’s $1600 that we spend each month before adding in the cost of food, clothing, toys, entertainment, etc.

When you add the additional “savings” cost for future education, it’s easy to see why I don’t feel we’re even remotely close to the third stage of personal finance — notwithstanding how well we’re doing and have done with the fundamentals. But I’m confident we’ll get there — eventually.

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1) Have only one kid—it’s awesome, you get to experience parenthood but you don’t have to spend all your time pulling them off each other or listening to them bicker (that alone is worth its weight on gold, people). Your kid will not be spoiled or deprived or sad. Your kid will feel truly loved.
2) one parents stays home and does whatever they can to keep costs down/save money
3)homeschool the child—you REALLY get to know your kid and your kid will be a lot happier if you let him/her pursue their own interests.
4) if you think you don’t want kids, or if you’re on the fence: DON’T HAVE A KID. It’s very hard. You will be miserable if you’re not into it.

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marmom

Thank you for this post and responses. It was a rough day with all of my kids + all of the neighbor kids at my house today. My husband and I are watching every penny in this economy. Really they are worth every penny and it is paid back in love every day and is a great investment when I’m old and really need their help. I realize how thankful I am for my kids, no matter how ‘expensive’ they are.

I should have enjoyed the day more just being with them instead of being annoyed at how I ended up ‘babysitting’ the neighborhood.

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reader of this board

Well, when you add it all up (medical expenses, school, bullying and problems) kids may not cost you alot in the financial terms (unless they are handicapped) but they cost you more in the long run in other ways. Maybe it is best not to have children, because this way, you can still pursue your dreams, and you won’t have them getting in the way. Food for thought

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happy and childless

I am a very successful female with no desire to have children. And I love my life. I love having the independence and freedom. I love being able to take a vacation, buy nice clothes and save alot of money each year. I have no debt. I paid of my school loans. I pay off every bill when it’s due. I don’t regret one single bit not having children. I know other women who regret having children and wish they could have my life. I feel very blessed to have my life. This is life I always wanted to live. Financial security is wonderful.

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David

The mentally challenged people fail to see that a kid costs well over half a million dollars. Lets say that a kid costs $500 a month, which is extremely cheap. Now if you had invested $500 a month in good stocks at 12 percent, instead of wasting it on the kid then you would have over $500,000 after 21 years, but don’t just take my word for it. Check it out for yourself with a savings calculator.http://www.finance.cch.com/sohoApplets/CompoundSavings.html

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lady t

WELL, TO MAKE THIS SHORT I LOSS A SON, AND GOD BLESSED ME WITH 4 MORE,AND I MIGHT NOT BE RICH,BUT BELIEVE THAT I AM VERY WEALTHY ,AND I WOULD NOT TRADE THEM EVEN IF IT MEANT THAT I WOULD GO THROUGH THE HARDSHIPS THAT I HAVE ENCOUNTERED IN THE PASS, GOD HAS A PLAN FOR EVERYONE REMEMBER THAT STAY BLESSED!

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Jason Kratz

I have to say that having a life insurance policy on the kids is very cheap and helps make sure they can get insurance later in life if they have a medical issue that would prevent that. Someone else pointed this out in the comments.

One of my responsibilities as a parent is to provide for my children and I see this simply as one leg of that. My mom did it for me….I am doing it for them and its cheap.

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La BellaDonna

Rdzins, I don’t believe Snowballer’s post was a slam at you, personally. I live in a densely urban area, and I can assure you that there are plenty of families who do, in fact, behave in the manner that Snowballer describes: their attitude towards children is the more, the merrier, because the children are money in their pockets, because the taxpayers are supporting them, not the parents. Again, at least in this urban area, it isn’t generally possible to raise enough food on the fire escape – if you have one – to feed your family, nor are the children able to run around on the fire escape to play. Not everyone has that 3-acre option, Valerie. It is absolutely possible to spend $1,600 a month OR MORE on daycare for children; economically, it often seems as if it would make more sense for one parent to stay home, rather than have the majority of one person’s income go for daycare – but what happens when the stay-at-home parent suddenly needs to be a WORKING person? That big blank space in someone’s work history can affect how much he or she makes, and whether or not he or she gets hired at all. More importantly, down the road, it ABSOLUTELY affects how much Social Security someone gets; it might make more sense, financially, for that very reason for both parents to continue to work even though the majority of one parent’s salary pays for daycare and commuting costs.

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La BellaDonna

Tyler, if your family is living on your income, and your wife’s job is raising the kids, I respectfully urge you to NOT consider life insurance as “optional.” Most ESPECIALLY in your case, it’s not an optional! God forbid you’d been in the Towers in New York on 9/ll, how would your wife now be paying the bills to raise those children? Two people I knew WERE in the Towers on 9/11; one made it out, the other almost made it out. Another friend was supposed to be there, but her appointment was changed to the next day. It happens. Death comes when you’re not expecting it, when you’re not ready for it. I would suggest for ANY family living on one salary, the breadwinner, at the very least, should be insured. I would suggest, if possible, that the stay-at-home parent be insured, too; if something happens to the SAHP, what will pay for the daycare that may suddenly be needed?

I do urge you sincerely to reconsider the necessity for life insurance, at least for you, as the breadwinner.

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Katie

I think the point was very clear. Of course, perhaps since I am a single parent with debt I can see it.

If I did not have the expense of child care, I would immediately have an extra $800 to apply towards debt. Since I do have the children, this is a mandatory expense, so the opportunity cost of having children in this scenerio is NOT having an extra $800 to pay towards debts.

Children need clothing. Their clothing gets worn out or outgrown much faster than an adults. Even using thrift stores, garage sales and the like, for my two children, I spend about $800 a year on clothing. Of course, my children probably do have more clothes than necessary – meaning that I provide the luxery of having more than 3 pairs of pants, 5 shirts, 2 pairs of shoes, and a couple of summer outfits. But, since I provide them with the need of clothing and the luxery of having a bit more than necessary, that is $800 a year that is not being applied to other financial goals.

School activities come up. Neither of my children are in school promoted sports programs currently, but that is more because of my current school/work schedule than because of budgetary concerns. Other school activities such as field trips and simple school supplies do come into play. Say I spend $200 a year per child on these things, or $400 total. That is $400 more I am not utilizing towards other financial goals.

Now, do I regret having either of my children. Absolutely not. It is just a fact of life that when you have children, you have obligations and priorities that those without children do not face, thus those without children can move along the path of financial independence at a faster rate.

And this is the point. If you are planning on having children, realize that your priorities will shift and it may take you longer than people without children to reach the same level of financial independence. It doesn’t matter how much or how little you make – having children WILL reshift HOW you spend your money.

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Beth

@ Kevin, I’ve heard about the “Selfish Gene” stuff too, but I think you’re overlooking a few key points.

First of all, adoption isn’t a cheap or easy process — especially if it’s from a foreign country. It’s not like ordering a sweater from a catalog. I think your ideas of adoption are some what outdated… Unless it’s different in the U.S., there aren’t a bevy of orphanages you can just walk into and take your pick. (Perhaps you’ve never heard of foster care?)

Second, it isn’t selfish for a woman to want to experience pregnancy. (Perhaps it’s difficult for a man to understand). Why shouldn’t a woman explore every option that’s available to her? The fact that you’re using the Octomom as an example of why people shouldn’t do it shows how little you know about the procedure.

Third, as for it being environmentally unsustainable to have more than two kids, well I agree to some extent — but this isn’t China or a developing country. Many couples are only having one child, or no children at all. In fact, some Western countries have to rely on immigration to keep their numbers up because their own citizens aren’t sustaining the population in the long run.

If you don’t want kids, don’t have kids. I realize how much judgment you’ve faced from others because of that decision. It often happens that the decisions we make for ourselves aren’t necessarily what’s best for other people, or for everyone in general.

Live and let live.

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Single Ma

I disagree with this entire post. It reads as if the writer is using her children as an EXCUSE to make poor financial decisions. This part, in particular, rubbed me the wrong way:

If my husband and I didn’t have children — if we didn’t have to provide for them now or worry about providing for them in the future — our non-mortgage debt would be completely paid off, we’d be paying a lot extra on the mortgage, and maxing out our retirement contributions, all while still having a comfortable amount left over as spending money.

Because we have kids:

* We’ve chosen to have a larger cash cushion.
* We’ve delayed paying off our debts.
* We’ve reduced our retirement contributions.
* We have greater expenses in the form of childcare, clothing, medical needs, and life insurance premiums.

Hmm…interesting. Not only do I have a child, but I am also a SINGLE PARENT (read: ONE income, same responsibilities). I too prefer to have a large cash cushion, BUT I’ve paid off ALL of my non-mortgage debt AND I max out my retirement (both 401k and Roth). In addition, I too have greater expenses in the form of clothing, medical needs, life insurance premiums (for self), and the alternative of childcare (I have a teen but she’s involved in TONS of extra-curricular activities and heading to college in 1 year) – all while having a comfortable amount left over as spending money and vacations each year – let’s talk about a balancing act! However, I find NONE of my responsibilities or extra expenses as a parent to be a deterrent to my financial freedom. I simply have different priorities than non-parents and I have to be strategic with increasing my income and reducing unnecessary expenses. Children are expensive, yes, but they are NOT excuses or roadblocks to financial freedom.

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Joy

I was really grateful for this post because I’m someone who has, for the most part, gotten my finances under control, but who can’t seem to gain ground mostly due to the fact that I choose my children over my work repeatedly and have had to let opportunities go so as to actually spend time with them.

Did I choose this? Absolutely! But I can follow all the good personal finance tips in the world and if the income isn’t there they won’t get me to financial freedom. Because I stayed home with my sick kid for months or turned down the promotion with too much travel or quit the high paying job with the long commute, I’ve set myself up for years of lower incomes and less experience in the workforce.

Spending some years as a single mom, and some years as a stay at home mom, on incomes from 10k a year to 90k a year and back again, usually by choice more than circumstance, my focus has been on knowing my priorities and making the choices I can live with.

For me the priorities are:
– Parenting my children as I want them parented – homeschooling, lots of time outdoors, community involvement, eating healthy food, healthy family relationships.

– Staying in the city we love, in a home where we can have an urban farm. Paying the mortgage drives my financial requirements.

– Living without debt. I’ve got debt on the house and that drives me crazy. But I’ve paid off the rest and have habits that will keep it that way – barring emergencies. That’s the wild card, because if anything really awful happened we’d have to borrow to pay it.

– Spending money on things that build or provide for our long term financial health (insurance, garden), spending on things that provide important experiences for us.

– Saving whenever there is enough income to cover the basics, before going for extras.

I had my kids on the young side and on my own. I was in decent financial shape and quickly lost all that and eventually got it back.

Now I’m only 33 and my oldest is about to turn 10, the youngest is 8. When I’m 43 and my girlfriend is 37 my kids will be entering adulthood, and I’m looking forward to being so young with so much life (hopefully) ahead of us.

In the years that have intervened I’ve become much clearer on what really matters to me and interests me in a way that I don’t think I could have before I had kids. I can assume that trend will continue. While I don’t always have the time and resources to put those plans into action now, I’m glad that I had the kids when I did, so that I’ll have time to make things happen when the kids are older that I never would have thought of if they hadn’t come along when they did.

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RJ

It seems to me that the point of the post is simply cautionary: “If you think you might have kids someday, adjust your lifestyle so that you can meet your family and financial goals as much as possible.” A related point of the post might be: “Having kids will transform you in ways you may not be able to imagine; your entire lifestyle and personal culture will probably change radically.” Not exactly earth-shattering points, but still worth sharing. I don’t understand the hostility some people have toward this post.

Unfortunately, the usual fault lines between the childful and childless, or the child-burdened and the childfree, have emerged. Of course, children are a blessing to those who want them and who believe that a fulfilled life can only include children (and grandchildren). And of course, children are a drain on those who believe that a fulfilled life is one spent on reading, travel, volunteering, and other high-engagement activities. And some people cross over into both categories.

It is disturbing to see comments such as this, though:

“Yeah kudos to the guy in the magic third stage who will have all that money in retirement with no kids or family – grandkids, in-laws… I hope he can enjoy perusing his bank statements well into old age.”

So the only choice is family or loneliness? I don’t think so. All people–with children or without children–would do well to build the personal fortitude, inner resources, and social network needed to deal with as many stages of life as possible. No one should be in a situation in which, absent children, there is nothing but an intellectual, cultural, or social vacuum. To suggest that a person’s purpose for living resides not in that person, but in children or other people, is reckless. And in some way, that philosophy makes children no better than an emotional crutch. Many people choose not have children for many valid reasons, and there many other roads to personal fulfillment. To each her own.

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Jen

I get tired when SAHMs assume that every mom who works is doing it so their family can afford large SUVs and vacations. I am a working mom to two kids and yes, we can technically get by on my husband’s salary, so I did a careful analysis of whether it would be better for me to work or not. First of all, I have a good job with excellent health insurance though my husband does make a lot more. Yes, we spend a lot on daycare but I think I will be a lot more employable if I don’t leave the job market for a few years. I also like how my income gives us a financial cushion and allows us to save for retirement instead of just barely struggling along. It also takes a little pressure off of my husband and allows him to relax and spend more time with us.

I think it’s great if you can stay home but its different for every family and it’s not always the best choice! Of course it would be fun for me to be with them all day but in the long run I think I am doing the best thing for them and isn’t that really what most mothers try to do?

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partgypsy

Kevin, you sound a tad defensive. Let me guess, does your wife want to have a child and you do not? Please remember that other people can have opinions that differ from yours that can still be valid.

Regarding the quote “that’s what you do”, read “The Selfish Gene”. In a billions year old sense that IS what we were designed to do. Wanting children is no more or less selfish than you wanting your wife all to yourself.

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Kevin

@Chris (#110)

“My wife and I just spent 10k on two rounds of in vitro. We want nothing more than to have kids.”

Wow, that sounds so incredibly selfish.

There are thousands of children out there awaiting adoption, and rather than give one of them a loving home (and putting your $10k to better uses, like feeding the homeless or innoculating African babies), you’d rather spend it in a desperate attempt to perpetuate your own genes. I know this is going to come off as horribly rude, but I’ve got to say, I find that outrageously arrogant. What is so unbelievably important about reproducing with your own genes? Are you really so self-centered that you’ll spend $10k just trying to make a copy of yourself to go out into the world and tell the future how great you were?

Is this the same desire that drove Nadia Suleman to have 14 children whom she’s utterly and completely incapable of providing for? Why do we have to be confronted with such an extreme example of child abuse before we’re finally willing to break with convention and question a parent’s motivation for having children? Is the covenent of parenthood really so sacred and beyond reproach that it’s only when an unemployed, unmarried welfare-queen births her 14th baby that we finally step back and say “whoa, hang on, maybe this isn’t right?”

I’m just in awe.

@Trevor (#120)

“Kids are great! Have them. That’s what we’re supposed to do.”

Who said that’s what we’re “supposed” to do? So if someone is infertile, or never meets “the one,” or (God Forbid) just plain doesn’t want kids, then they’re not doing what they’re “supposed” to do? Well excuse me! I was under the impression that the meaning of life was to enjoy it. If your idea of enjoying it is having kids, then go for it. But if I value freedom and time with my wife over some ingrained need to perpetuate my seed, then is that really wrong of me? Who decided how I’m “supposed” to be spending my life?

I really wonder about these husbands/wives that are so desperate to have kids. Is your marriage really so empty and unfulfilling that you just can’t wait to bring another person into it to give you something to do? If you’re married, and you feel like you’ve got “so much more love to give” that you need one, two, or five babies to share your love, then maybe the person you married isn’t “The One” after all, is that possible?

I love my wife. I love spending time with her. I love it so much that I don’t want to share it with anybody – even my own offspring. Does that make me a bad parent or an awesome husband?

If every couple had 6 children, this planet would be destroyed within a couple of generations. 2 people having 6 babies is simply unsustainable. It’s selfish, in my opinion. And every time I see a yuppy couple with 6 babies boasting about driving a Prius and installing CFL lightbulbs, I don’t know whether to laugh or cry. Because the amount of meat, oil, and freshwater that is going to be consumed by their triplicate copies of themselves will far, far overshadow any token “green” efforts they think they’re making to “save the planet.” Yet they’ll drive around in their hybrid SUVs with their yellow “Support the Troops” ribbon sticker on the bumper, buying organic lettuce from South America and thinking they’re part of the solution. Unbelievable.

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Katrina

Cathy … thanks for putting yourself out there and sharing one perspective. This many comments = success at what you wrote. Those who felt the strange need to nitpick or insult are the same people who stand on the sidelines and judge the athlete.

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Mary

Having a kid was a motivation get my finances in order. Before my first child came along I had almost $25,000. in debt. Within a year and a half, I was able to wipe out all of the debt while working only 27 hours a week! I was surprised at how I could actually live on less money and pay off my debts. I must have bought a lot of useless junk that I no longer own and spent them on experiences that I don’t even remember.

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Aperson

Stay-at-home moms: a few of you have said that your childcare is “free”. It is not. It is the difference between what you could have been making and what you make now (your current salary is zero).

I waited to have a child until I was quite established in my career, so I am making quite good money. That gave me some good choices I could make in childcare and I went with a nanny, which costs me $1760 per month for one child. $800 for everything seems like peanuts to me. I can’t wait until she’s in school full-time and I can bank the nanny costs.

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Cathy @ Chief Family Officer

@chacha1 – Nope! It’s a lot of fun, though 🙂

@Erin – I live in Los Angeles, and $800 is on the low side here too. But their preschool is a nonprofit which helps keep costs down. And I agree, having children makes me more creative too – I don’t think I would have started blogging (at least, not when I did) if I hadn’t become a parent. Thanks so much for your good wishes!

@Kristin – Thanks for your kind words. I would definitely encourage you not to worry too much! As others have noted above, my point was that having kids can delay the achievement of financial goals, but if you’re focused, you’ll get there anyway. And what you’ll gain in return from becoming a parent is absolutely immeasurable. Good luck!

@tamarind – You make an excellent point – there are so many variables to consider when it comes to kids and finances. I also love what you said about considering the cost to one’s future income in the staying at home equation – it’s so true, and not something I’ve seen mentioned much.

@Nancy – Well said. I’ve always known I would be a mom somehow, but I certainly don’t think less of anyone who decides not to have children. Some of the most wonderful people I know don’t have kids!

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Nancy

You do realize that people WITH kids also donate to all of those charities you mentioned–many people with kids even start/head up those charities. It’s not an either or proposition.

My personal feeling is that there is room in our society for all sorts of people and all sorts of life and family configurations. Kids, no kids, married, single, etc. Everyone’s different and our life stories will and should play out in different ways. There are many paths to being happy and getting fulfillment from life.

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E

Ok I’m pretty sure the original poster didn’t mean for the thread to take this turn but Jason’s comment is uncalled for. Lots of parents are lonely in retirement – visit any nursing home to see – and lots of childfree people surround themselves with friends and family. http://unscriptedlife.net/articles/friends-in-old-age

Kids are worth any price to those who have them. The rest of us have other priorities. If we were all so focussed on our own kids, there would be fewer of us donating money and time to educational charities, foster child support, ending childhood disease, child abuse, child poverty, child hunger… the list goes on. Parents (or future parents) like Jason seem to think they’re superior, but the fact remains they need us.

Sorry JD and Cathy – but I guess you know, when you post about kids you open a can of worms. 😉 Didn’t the same thing happen to the “cost of pets” thread?

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Jason

Yeah kudos to the guy in the magic third stage who will have all that money in retirement with no kids or family – grandkids, in-laws… I hope he can enjoy perusing his bank statements well into old age.

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Brenda

@December Clouds:
if only they had this as a checklist for young wannabe parents. i remember a girl in my high school chemistry class saying that her boyfriend wanted her to be pregnant to prove she loved him…. that was a sad situation.

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December Clouds

I’m glad to see people like La Bella Donna & Rika. The reason for having children is to raise a productive member of society.

It is not:

1. To have a mini-me who you automatically think will share your interests.

2. To save a marriage.

3. Because “that’s what we’re supposed to do” — this is not a valid reason.

4. To have someone take care of you in shifts in your old age. This greatly restricts the life of your children to the point that they won’t be able to do what they want to do in life until you die. Do you know how it feels to not be able to leave your house for more than two days until you’re over 50 because of your mom or dad?

5. Because they’re cute or because someone told you to.

If you have children for these reasons, this may back-fire on you.

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tamarind

@post 129: Milk Donor Mama

I agree with you that in some respects many of the expenses associated with children are optional ones. However, for myself and many people, the “basics” which while still representing a “choice” don’t have the frivolous feel of the kinds of “best of everything” that you list (health care, access to decent public schooling,housing, insurance,–and I won’t even get into any associated costs if your child ends up with any special medical/developmental needs).

I think we also need to be careful with our assumptions about what our parents were able to do with us vs. what we can do now, because employers also used to provide pensions, more subsidized health care, and the costs of basics such as housing has grown dramatically.
Also, a key factor centers around higher education. As someone who works in higher education and thinks about this a lot, even low-cost public higher education costs have skyrocketed. (And more middle class jobs require a BA as the minimal entry requirement than 15 years ago). And the financial aid that may have been available 15 years ago to supplement college education has drastically shifted towards student loans. I was able to piece together a college education through scholarships, financial aid in the forms of grants and small loans, my high school and college part-time work, and contributions from my family that they could afford with 3 kids and a family income between 40-50K. I have very few students currently who are able to do the same.

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Kemmy

I think it’s great if you choose to have kids and have thought things out clearly. Your life will change for sure, a lot of sacrifices are required on your part, and it’s wonderful, assuming of course you can afford them and not just count on government help etc. to raise the kids. This eliminates basically everyone blogging. I doubt if the welfare families are logged on.
My husband and l chose not to have kids, l don’t think we’re missing all this joy etc. that most parents seem to think is absent from childless couples’ lives. We just choose to enjoy our lives with each other. It is quite possible to forge family relationships with tah dah..family! meaning your kids, and grandkids, nephews,etc. In our old age, they will feel the tug, especially because we had a hand in raising them, both financially and emotionally. I work in a field where you see the really ugly side of parenting, and once when a parent was telling me how it was great they would have someone to carry on their name etc.. l couldn’t help but ask exactly what she had contributed to the world so far that she felt the world deserved her spawn. She was 34, with 4 kids, jobless and on welfare! All l saw was a cycle that was going to be repeated.
Each side has it’s good and bad. One should not feel bad about having them, and one shouldn’t feel bad about not having them. One should feel bad about NOT providing for them, they didn’t ask to be born. Just my 2 cents!

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PB

There are a lot of things that you don’t think of when raising kids. I am totally glad that we had our three, but there have been a lot of expenses along the way that we did not count on — and we are pretty frugal people. The latest one I am dealing with: youngest child wrecked two family cars in three years sliding on ice. The last one was a rollover. Thankfully, everyone walked away, but this added the cost of two cars to the budget at a time of three college tuitions. We have just decided that we will never retire!

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Milk Donor Mama

In many ways, kids can be as costly as you want them to be. If you intend to buy them the best and newest of everything, have lavish parties and holidays, outfit each of them with their own room, buy them a car for their sweet 16, pay for their entire college … then yes, they will be VERY expensive.

My parents raised me on and my sister on a family income of $40k. I just turned 30 and as far as I can remember, I got gifts for birthdays and Christmas, had clothes that fit, was fed and we had reliable cars and they own their home.

We make kids more expensive because we expect more and have taught them to do the same. Most of us, and our kids, would be just fine without most of the “necessities” the consumer culture has convinced us we need.

Oh, yes I do have a 2 year old daughter.

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tamarind

I think thinking complexly about the cost of children is an important factor of being financially aware/responsible. Thinking in this way does not imply that you are calculating the “value” children add or do not add to your life. That is a separate question. Nor do I think that there are any conclusions that necessarily follow from calculating the cost (e.g., you should wait until you’re debt-free to have children), but just that you should be aware in order to best think through your own situation.

The other thing I notice is that people quickly say “my children don’t cost that much” or “my children cost a lot more than that” per month, when there are so many ways of calculating cost and many factors are overlooked.
Just one example: full-time childcare in my area runs 1000-1500/mo. If I were a SAHM mom, I would need to consider the cost not only of my immediate loss of income, but any reductions in future income/security that arise from taking that time off work (there have been numerous studies that show on average the cost here is substantial). In addition, I may lose opportunities to contribute to a retirement account, future social security earnings, etc. I get annoyed when places advise that the cost of working doesn’t make sense and they only calculate immediate income and things like work clothes, transportation and drycleaning bills, ignoring the much larger long-term income issues. Again, as a result of thinking through this there are no set conclusions, just that you make decisions with greater awareness. In my case, I knew I wanted to have children and I knew I wanted to have a fulfilling career in addition to being able to spend ample time with my kids. So I sought a profession that I love that allows me a highly flexible schedule while still earning a full-time salary. I have used child-care minimally. (Of course to do this I chose to get a doctorate which I then need to calculate those many years of reduced income then! And when you add in the fuzzier costs of not sleeping nearly these past 12 years… So I definitely don’t see it as a solution for everyone)

As a side note, I have found having children quite expensive in terms of insurance and health care costs and my choice to live in a more expensive area to provide access to better schools. I spend very little extra on food, clothes, toys etc. I also have chosen to provide additional security via things like long-term disability insurance, a larger emergency cushion, larger life insurance policies for my husband and myself.

I’m quite afraid it is true. I’ve spoken to more than one person who has offered this very explanation. You have to understand that I pretty much live in a world of people whose AGI is consistently under 22k annually.

It’s really very sad. It’s not that these people are “bad” or whatever, it’s just that since they can’t really afford the kids, they’ve resigned themselves to letting other people pay for them. Their skills in getting this free stuff is quite impressive. They cheat on welfare and on their taxes, etc.

You have to realize they pay for NOTHING. If the state or someone else doesn’t give the child food for instance, the child just doesn’t eat. That’s how they operate.

The problem is that since they know they can do this, they’re indifferent to whether or not they have children and don’t even think about the consequences. Not everyone is like the thoughtful people making comments here or the lady who wrote this post.

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Kristin

Cathy,

Thank you for a thoughtful post addressing something that’s looming large in my future. My husband and I carry no debt except for our (still shiny and new) mortgage and are hoping to start a family in the next year or two. If it turns out we can’t have children naturally, we’ve acknowledged adoption as a definite option. I know from my friends who already have children that there’s no magic amount you have to save beforehand, because unlike buying a car there’s no set price to kids. But I also look at my friends who have no kids and are never planning to (…most of my friends, actually), and hope that my lifestyle won’t change so drastically from theirs that we drift irrevocably apart. I think about the cost of child care versus my salary and wonder if we could make it on one income, and whether or not it’d be fair to put that pressure on my husband if we did. I worry that I don’t have enough in retirement savings, that we don’t have enough of a cushion, that there are so many things could go wrong….

And then I think of my parents, who were well below the poverty line when they had my sister and myself. I’m still trying to figure out how they gave us everything they did and still manage climb their way up into rather respectable middle-class stature. And I figure if they could do it, so can we.

So thank you for a guidepost lighting the way on this journey.

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Kelly

I posted my thoughts on the subject at my blog.

I loved Erin’s comment (#121) above. I definitely feel we work harder because we have our children to care for then we would if it was just the 2 of us.

Cathy, loved the post and would love to see more content like this on GRS. I’d be happy to contribute my thoughts on family life and kids, and finances.

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Jasmin

Yay, more reasons for me not to have kids, and to use my money for better things. New Zealand, here I come! 😀

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Tim

Wow, what a post. I really appreciate Cathy’s candidness and JD’s willingness.

I have three kids, 10 and under, and I wouldn’t trade them for any monetary riches. I am glad that financial awareness/’freedom’ did hit my radar until they were out of diapers.

I can understand not bringing children into the world because so many people are trashing it (the planet) or killing each other, but to think of one’s comfort and ‘security’ first makes me nauseous (overpopulation is a real problem, but this is extreme). I consider the responsibility of caring for and raising my children the biggest privileged I have ever experienced.

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Erin@PlinkPlink

Very honest and thoughtful post. I’m not sure where you live, Cathy, but in NYC, where I live, spending $800/child/month is probably lower than average.

Personally, despite the additional costs of raising a child, I am so grateful that since becoming a parent I think much more creatively about making money. My ambition of climbing the corporate ladder has been replaced by an enthusiastic entrepreneurial spirit. Whether it pays off for me, we’ll see. But I’ve met lots of parents who have become more financially successful since they’ve had children — maybe because we have the pressure of providing for them.

Child-related expenses aside, consider additional ways you can add to your income stream — with the right idea, some hard work, and a good work-family balance, you might find yourself in the “third stage of personal finance” sooner than you thought.

GL!

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Trevor @ Financialnut

Kids are great! Have them. That’s what we’re supposed to do. Money is a MEANS to taking care of a family. Good post.

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Marie

@79 rdzins:

Be indignant all you want, but it happens. Especially with teen parents. My husband teaches in the inner city, and he has plenty of students with children of their own in school. The grandparents encourage them to have more kids because they all live together off the SSI checks.

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Marie

I completely agree with Rika. You absolutely can’t count on your kids taking care of you in your old age. Heart disease runs in my husband’s family, and his dad and two aunts died before his grandmother did. She lived into her 90s, and three of her four children didn’t make it through their 50s. Who would expect in this day and age that she’d outlive 75% of her kids?

Also, having multiple children doesn’t ensure they’ll share your elder care. My husband has one sibling, and he is mentally handicapped. Now, not only do I have to worry about my parents and mother-in-law, but I’ll probably end up responsible for my brother-in-law as well, who’s my age.

So many people base huge life decisions on these assumptions; it’s terrifying.

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The Arabic Student

Of course the author regrets having kids. Millions of people regret having kids. They just have to keep it to themselves because of what people would think if they were to actually SAY they regretted having kids.

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John M

I have to admit I just don’t get this.

Once you have a cash cushion in place, it’s not like it’s an expense anymore. You don’t have to keep adding to it. You shouldn’t reduce your retirement contributions, because you shouldn’t risk having to need your kid’s support in old age. Kids just don’t eat that much and they can be in consignment store clothes all the way until they reach school. The additional medical insurance riders just aren’t that large. Term life insurance is dirt cheap, and if you have to pay for a lot of childcare, that means both of you are working which means you should probably rearrange your priorities anyway.

I would need more detail about exactly what you’re spending money on to know if it was justified. Many of our friends splurge on their kids in ways they just don’t need to.

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chacha1

Hi J.D., Hi Cathy! Cathy, you’ve clearly been monitoring the comments … do you usually get this kind of all-over-the-map response?? Hee!

My DH and I have no kids, and aren’t going to have any. My takeaway from your post was, if you want kids, PLAN for them. To plan successfully, it is first necessary to think about what your values really are, then what your goals are, then what your timeline is, and then what your strategy will be.

As to regretting NOT having kids because if I did, they would support me in my old age!! … I am saving/planning for my old age, and I am good at making and keeping friends. I expect to spend my own final years surrounded by friends. I don’t have to grow my own.

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Rika

I astounded at the assumption of many people out there that kids are going to be around (or even willing and able) to take care of their doddering senile parents. That’s NOT a good reason to have children. I have seen so much family feuding regarding this matter, and I’ve seen too many elderly parents passed around like hot potatoes from grudging home to grudging home, before being finally dumped in sub-standard nursing homes and ignored while their kids fight over the family heirlooms like dogs over a bone.

Besides, there is no way on this planet I am going to take care of my evil bitch of a mother when she gets old. She doesn’t deserve a dime of my money, or a fraction of my time. I’m keeping it all for me.

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Ellen K.

@Chris — We also did IVF and I know exactly how you are feeling. Good luck to you!

@La Bella Donna — I join Beth in applauding your comments.

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Cathy @ Chief Family Officer

@Claire – Thanks for understanding my point!

@Chris – Yes, it’s contradictory but I get it. Good luck! I will pray that it worked.

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Claire

@Chris: How exciting! Best of luck to you! And it’s natural to feel apprehensive – kids are a huge (but wonderful) change in your life.

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Chris

My wife and I just spent 10k on two rounds of in vitro. We want nothing more than to have kids. We find out if it worked in a week or so..

I am still scared absolutely shitless if it works, though. Sound contradictory? It is..

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mhb

I’m grateful for this post. We don’t have kids yet, and we’re aggressively paying down debt and saving our pennies now, in hopes that we’ll have things more in order for when the wee ones come along (and… who knows… if we can’t have kids and we want to adopt, there’s another reason to have our finances straightened out beforehand). This is NOT to negatively judge folks who choose (or happen!) to have kids sooner: my parents and my in-laws both had kids before they were financially secure, and they did a fine job parenting.

I’m just glad we have the opportunity to get our stuff in order before we take that leap, and I’m always glad to get advice from people who have been there. Thanks for the guest post – I’m going to head over to your site!

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Claire

I don’t understand why some commenters feel Cathy is lamenting parenthood. It seems clear to me she’s just explaining that having kids slows down the process of reaching financial independence. This is true in my life as well.

Kids are expensive. I have two kids and their impact on our finances is significant, because I am a SAHM at the moment. Even when I return to work childcare will take a bite out of our bottom line. College savings also funnels some money away from other financial goals. Other incidental costs are a choice. Secondhand clothes and toys help a lot.

It’s just a reality for parents. It’s unfair to accuse Cathy of complaining when she is simply pointing out the truth.

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Mike

Personally, I don’t think I’ll save for college for my future kids, I’d rather pay down the mortgage debt first.

They can get a job while in school, and by that time the mortgage should be paid off and I’ll have significant positive monthly cash flow to give to them should they need a hand.

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Cathy @ Chief Family Officer

@Ellen – I just wanted to say that I’m sorry you had to come by that knowledge the hard way (I didn’t know about the minimum net worth, either). I think it all goes back to balance again, because fertility problems are so much less likely when you’re young, when you’re also more likely to be less financially secure. And of course, no monetary value could be placed on the emotional toll that infertility takes on the woman, her partner, and their relationship.

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Ellen K.

I’ve enjoyed both the original post and the comments. It’s unfortunate (but predictable) that some comments have been hostile. Many have said that there’s no good time to have or afford to have children. I have experienced both involuntary childlessness (due to infertility) and parenting, so I would qualify that statement with the recommendation that anyone who might like to have children someday should control their debt now, before trying for children, because the combination of financial problems and infertility is a terrible burden. Medical treatment is expensive and seldom covered by health insurance. Adoption agencies will look at your income:debt ratio; some agencies request that one parent stay at home for 6 months after finalization; some countries and agencies request a certain net worth (disqualifying many couples with law school or med school debt); and state foster agencies often require that each child have a separate bedroom, necessitating a larger house, and that one parent have a flexible work schedule to accommodate medical and other appointments. You have to walk a fine line between trying to have a child and being able to afford to care for that child.

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mccn

Having children doesn’t automatically mean someone will take care of you and your affairs when you’re old – just ask the 40 or so folks in the retirement community where my grandfather lives, who never see anyone but each other and make do as best they can on their own.

Having children doesn’t make you a martyr, neither does not having them – they’re both choices, and both equally valid. I don’t wish to have children for a lot of reasons. One of those is finances – I grew up struggling and working three jobs, and now I don’t have to do that anymore. I don’t want to have to go back to it.

I wish people with children would stop telling those who don’t want them that we’ll be lonely or we’re somehow irresponsible for not having them. No one has any obligation either way. If you have them, you should do it because you want to and can take care of them, financially and otherwise – if not, not. Let’s realize that these are both equally valid choices, and that we might make different ones.

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AD

I love how people cite other countries where “the government” pays for this and that…please replace “the government” with “the taxpayer.” No matter what your politics, let’s call it like it is.

I think parenting and finances are two hot topics that explode when they come together. Saying you should be financially prepared is taken as an insult by parents who weren’t prepared…”How dare you”…”I wouldn’t trade in my children for any amount of money”…etc.

Well of course not. It’s a human being. A child. But I want to be as ready as possible, both emotionally AND financially, both for my child AND so that money might be one less stress in our lives. I don’t want to be a new parent working on zero sleep and wondering how to pay the mortgage or stave off the creditors.

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Chris

@ Beth (#90)

I’m assuming Tyler meant life insurance wasn’t needed for the kids. I took it that the author had life insurance policies on her children, and I agree this is unnecessary. Unless it was a very small policy to cover funeral costs, what income are you replacing in the horrible even a child dies?

Even for a SAH spouse, I would say yes to life insurance, since child-care costs would come in in the event that something happened.

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Sierra Black

Cathy,

Thanks for this honest and insightful post! It was a relief to me to see another parent struggling at a financial plateau, and acknowledging the hard realities of finding the material resources to support our kids.

I just posted yesterday to my own blog the top 10 PF tips I’d be happy never to hear again.

The basic PF advice is sound, but doesn’t cover the complexities of supporting five people on one income.

In my experience, kids are expensive. They add more real costs (for food, health care, insurance, education, clothing, etc.), and also more variables (like a surprise broken leg). Everyone has unexpected needs once in awhile, and having kids makes you responsible for that many more routine and unexpected costs.

To the commenters who suggested that one *should* be financially sound and debt-free before having kids, as if doing otherwise were always BAD, let me offer a slightly different perspective:

Children are not a luxury good. Not everyone chooses the circumstances of starting their family; in fact 50% of pregnancies are unplanned. And it’s not the case that only the well-off deserve children or can parent them well. Many wonderful parents are dirt broke and still manage to raise happy, healthy kids. Finally, finances are an important piece of family life, but they are not the only consideration.

In my case I chose to have kids while I was young and broke because I wanted to be a mother and my husband is 15 years older than me. We wanted to have our family while we were both still young enough to enjoy chasing after little kids.

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T

We are having twins this summer and are anticipating paying between $1000 and $1300 per month PER CHILD for daycare alone starting next year. And not especially spectacular daycare, either—just the only places we have found relatively close to where we live where we’d feel that our kids would be safe and well cared for. That’s just what the cost is around here. (We live in a big city, not in the suburbs or in a rural area.) I understand the thinking that for that price, kids should be learning Chinese and trigonometry and be able to cure cancer, but it just doesn’t work that way.

And yes, if I stayed home, we’d be “saving” all that money every month, but (1) I’d be losing a lot in both immediate and long-term earning power by taking myself out of the game for five years (and then having to figure out a way back in later on), and (2) I find my career fulfilling and believe that happy parents = happy children, even if we’re not home with them 24/7. I like my job and my company, and giving that up isn’t something I’m especially eager to do. If it made crystal-clear financial sense for me to stay home, I would probably do it, but it’s not crystal-clear.

There are other financial considerations, like the fact that if I weren’t working, adding the three of us to my husband’s health-insurance plan would cost about $700 a month, whereas adding our kids to my employer-paid health-insurance plan would only cost about $150 a month. That’s just one example.

When you add up the long-term opportunity cost of not working, does the math still make sense for you? And do you actually like your job? Those questions should also make it into the considerations. If you hate your job, it might make more sense for quality-of-life alone to stay home with kids. But it’s not necessarily the most frugal choice, and those of us who choose to work aren’t necessarily killing ourselves just so we can buy our kids a bunch of expensive junk, either. My husband and I want to travel a lot when we retire, and we want to retire young, so it makes sense for us to both stay in the game right now. Nobody gets 401(k) matching for staying at home.

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frugalscholar

Honestly, I keep waiting for my kids to “get expensive” (they are 18 and 20). My husband and I got a late start on both work (advanced degrees) and kids (age 35 at first). We did not have the high income of the previous poster (teachers). It’s all about choices all the way. I have written about our college choices and will eventually write about other choices we have made over the years. As in “Your Money or Your Life” consciousness is the way to go!

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TosaJen

@Cathy: I found that a few statements piqued my curiosity:

“I still consider myself to be firmly entrenched in the second stage — and I’ve been in this stage for years already, and will continue to remain in it for the foreseeable future.

And I realized that it’s because I have kids. J.D. doesn’t. Now that he’s paid off his non-mortgage debt and begun saving, he can think about grander things.”

There are a whole lot of people who will say this isn’t strictly true. You’ve made a bunch of choices along the way that make this true, in addition to the kids. That’s where things get interesting to read about. 🙂

I will take a look at your blog (probably have already) when I get the chance!

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Beth

La BellaDonna and Jla01– a big THANK YOU for your comments. I’d applaud if you could hear me.

I’m glad people appreciate the value of family. Just don’t rub the salt in our wounds if we don’t have what you have.

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Mama L

What can I say, I love GRS and I love the guest posts. The honesty of this post is cool. Our family’s experience is that having kids really improved our financial focus, but we’re moving much more slowly towards our goals. Financially, having kids has been a mixed blessing.

Like all things in parenting, nothing can prepare your house, your relationship, your heart, or even your account balances for the impact. Becoming a parent is a seismic experience. (And, for the record, I’d do it all over again in a heartbeat and would choose my kids over having a bazillion bucks any day. Okay, most days.)

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Jim Z

@ all the posters who are questioning what % to do what with vs. save for kids education and/or pay toward better schooling:

I think this is probably one of the first generations that are thinking of themselves first rather than their kids. Any previous generations would sacrifice almost EVERYTHING to give it to their kids if it was going to give them a better chance at a successful life.

I’m not talking about a sacrifice so your kids can wear the most expensive clothes or drive a new BMW they day they turn 16 either. I’m merely talking about banking every dime you can to give them the biggest head start possible. And teaching them the lessons learned *before* sending them out the door to live on their own.

One thing everyone seems to forget here, is that there is one big, huge caveat to all our plans. Death. You don’t know how much time you have to get your kids on the right path. My dad died when I was just going out on my own (1 year into my now 13 year marriage) and he was just starting to teach me some of his life lessons. I hope to start much earlier with my son, as I don’t want him to have to find his way in the dark as much as I have, or to try to correct mistakes once you find the path.

Everyone should be making every sacrifice they can to give their kids a better future.

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Tyler Karaszewski

@Beth: I do have some (fairly small) amount of life insurance through work. I believe it covers two or three years of my salary, and the premium on it is very low (in the neighborhood of $100/year). I also have our savings, and my 401k, which continue to grow.

So, in the event that I was to die, my wife would be left with a minimum of three years of my salary. If she wanted to be extra frugal, she could probably live on this for 10 years. Once we have children, that time span will be shorter, but by then, my 401k and other savings will be bigger as well.

So say she has five years of expenses covered. This gives her five years to get back on her feet. She’s a smart woman, and she’s not incapable of working for a living (she works now, and will continue working until we have kids).

So, if I die, my family is not set up to live carefree for the rest of their lives, but they are set up with a cushion to land on so they can pick themselves up and carry on. Considering that I’m pretty unlikely to die in the next 25 years, I think this is an adequate level of protection.

If I lose my life insurance through work (say by changing jobs to one that doesn’t offer this benefit), maybe a moderate life insurance policy like this is a worthwhile investment, but it’s a small investment and makes nearly no dent in a number like $1600/month. I still think that life insurance costing hundreds of dollars a month (as is implied by this article) is an unnecessary luxury.

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Cathy @ Chief Family Officer

There’s only so much room in a guest post to fill in all the gaps, suffice it to say that we are actually doing quite well, financially. My point is simply that having children has changed our priorities and slowed our achievement of non-child-related goals like retirement savings and being debt-free. In other words, having children is slowing my arrival at the third stage, as defined by J.D., but I’m definitely not complaining about it – just pointing out that simple fact.

@TosaJen – Can you clarify or expand on what you’d want to know in a follow up post? Alternatively, a lot of your curiosity may be satisfied by checking out the posts over at Chief Family Officer – needless to say, there’s a lot more info about me there than there is here!

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John Love

Kids aren’t as expensive in countries with a national healthcare system, government tax subsidies that actually make a difference and a cost of living that isn’t overinflated. Perhaps this is another anecdote on the depressing state of the American economy, and the inability of the US government to do anything but raise taxes and devalue your hard earned money.

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Carmen

It seems to me from reading the comments, when looking at children-related expenses there needs to be two sets of numbers. One set for a family with a SAH, one set for no SAH.

There is so much discussion about being frugal on clothes, toys, etc. For me, these expenses are trivial compared to childcare (which I’m not willing to skimp on), medical, and college savings.

I think the main takeaway of this post is for the younger people out there. Don’t waste away your money now and expect to save later in your 30s and 40s when you settle down. If you plan to have a family – start saving for it now – don’t wait because it gets much harder.

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Beth

@ Tyler — You mentioned that you don’t include life insurance because you don’t believe it is necessary. Assuming your wife’s “job” is to take care of your children, what will they do for income if something happens to you?

Just curious about what the contingency plan would be.

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Jay

I find it amusing when people try to count up the “cost” of having a child.

To those of you who think $800/m/child is excessive… is that because you have a spouse at home caring for them? If you count in the lost wages of that caregiver what is the cost then??

When my child was young and as a single parent I didn’t have the option of not having child care, and infant care at that time was $560 CDN per month. Now I understand it is more like $800 JUST FOR CHILD CARE. Add food and clothing, and it is much more.

But other than the obvious costs (child care, children’s clothing, etc), how do you calculate the savings of NOT going to the movies because it is more fun to stay home and play? Or the cost of seeing a movie that you don’t want to see because the 8 year old will DIE if you don’t see “Monsters vs. Aliens” when you would rather see the new Julia Roberts movie?

When I was pregnant I was told that “Children cost every dollar you make. Be it $10,000 or $100,000 or $1m” and it is true (and false, like all ultimate truths) because there isn’t ONE decision I make in the day that doesn’t factor in how it will affect my daughter.

When I had her I was earning less than $10,000CDN per year. Now I earn many times that much, but still every dollar is prioritized to provide her with her needs, then me with my needs, then her with her wants. My wants come in last place.

But my happiness is depenant on knowing that I am doing my best for her. What cost is that happiness worth? Every penny.

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Holly

Everyone, remember, term life insurance is not expensive…I pay under 200/yr. for my 300,000/20-yr. insurance (I am a stay-at-home mom; husband is insured for MUCH more. This premium has a rider to include $15,000 worth of life ins. for each of my 3 kids!) Parents, don’t make excuses for not protecting your kids’ futures–GET LIFE INSURANCE–but buy TERM, not WHOLE LIFE (expensive rip-off)
BTW- My husband is a police officer and it IS necessary (still cheap). And, No, I have no interest in the insurance business.

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TiredButFulfilled

This is a great article that helps me stay focused on the big picture. One thing my hub and I did 6 yrs. ago to be able to save more was cut down the #1 expense – taxes. It was an “ah-ha” moment when we were introduced to Sandy Botkin. We were able to save an extra $10K every year, and dump that into savings. The key is not to spend it! Chk it out here: http://www.taxdeductionstrategies.com

Oh, also I’m a big believer in saving for retirement 1st b4 kids college–they give loans for college, but they don’t give loans for retirement.

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TosaJen

The article is OK, but as others said — light on details and concrete suggestions. Maybe she can do a follow up?

We have 2 kids, and we’re at the 3rd stage. But, we had no consumer debt and significant savings when we started our family. We were also borderline “old” — DH was 40 and I was 33 when our 1st was born.

DH has been a stay-at-home dad almost since my son was born. That wasn’t the plan. We thought we’d do the dual-income daycare routine, until #1 came out. Then, it was a decision about who had to go back to work. I don’t want to take the discussion off-topic with the whys of our decision.

We are pretty frugal, so our issues are more about “the opportunity costs of having children”. DH and I were making $150k+ combined before kids. We would undoubtedly be FI by now, had we not had kids and forgone one income. We knew that, and had them anyway. It was a conscious choice. (So was having the kids “old” — we had agreed that we would foster/adopt if we had fertility issues.)

However, having one parent as “household manager” helps us keep our expenses down: less stress, more time for smart shopping and financial management, minimal childcare expenses, home cooking, parental tutoring and enrichment, etc. So, I wouldn’t be surprised to find out we’re about where we would have been if we had both kept working after the kids were born.

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Valerie

Wow! “That’s $1600 that we spend each month before adding in the cost of food, clothing, toys, entertainment, etc.” Having “come out on the other side” of child rearing in the black and with a substantial amount of money in savings, I cannot believe it costs you so much! Of course, I stayed at home with my children until the oldest was in high school. We lived on one paycheck. For a while, we only had one car. You can save a lot of money by not needing work clothes and having only one car! I became the “garage sale queen.” Used clothing, toys, etc. saved us a ton of cash! We grew, canned and froze most of the veggies we ate. The weeding also kept those kids entertained/busy! We lived on 3 acres, so there was plenty of room to run and play. When I went back to work, my paycheck became “the college fund.” We saved for retirement all along. One thing I have heard thrown out there recently is: “You can take out a loan for college, but you can’t get a loan for retirement.” I think this is so true. As far as your children’s education is concerned, your kids should also be expected to contribute to their college experiences. Let them know far enough in advance how much you are willing to give toward it each year. Also, they need to know how many years you are willing to contribute. Four years is all we gave ours. Funny how they managed to graduate in 4 years! Lots of stuff to think about. But I do think that just starting at $1600 is excessive. Cutting corners is hard work, but very worth it!

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La BellaDonna

I would also like to take a minute to respond to those readers who keep saying, If you don’t have a family/kids to spend your life with, who cares how much money you have?

Not everyone who wants kids can have them. Not even by adoption. Not every person who would like to go through life with a partner meets the right person.

Are you seriously telling me that these people have no worth? Or are you just saying that their lives aren’t worth living?

I’m guessing that at least some of you have managed to make people who’ve been less fortunate even more miserable than they might otherwise be. Conversely, it is also possible to build an extended family with people who care for you even if you don’t marry – or have kids.

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Jla01

“A hundred years from now it will not matter what my bank account was, the sort of house I lived in, or the kind of car I drove…but the world may be different because I was important…in the lives of others.”

Honestly, I’m on the childfree side of the fence for a multitude of reasons.

I am pleasantly surprised that the majority of comments are balanced and thought out. Most places are very, VERY anti-child free and consider anyone without kids to be (take your pick) selfish/insane/criminal/to be pitied, etc.

I do think that with getting my financial act together with my wife we can both contribute to society without having children…teaching, charity work, etc.

Hence the tweaked quote from the poster above. If you want kids, great!, bt if you don’t want children I think that ‘s a great option too.

Before my wife and I got married last year, we had long talks about how we envisioned our future. We decided as a couple that we would delay having children until we a) have a few years under our belt living with each other, b) establish our careers and c) making sure we take care of our finances and eliminate our student loan debt. It does make it really hard when all of friends are starting to have kids. We would enjoy our kids growing up together. Already, we have seen the financial hardships are our friends are going through. That’s one thing we are not envious of.

Stupidly Yours,

Matt

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financialwizardess

OK, I’m a bit confused as to what this post is for. I’m disappointed that the author hasn’t done better financially. Is this just a post to make parents feel better if they are not as far ahead as they had hoped? Yes, raising kids is expensive. I have 2 of my own – 1 in diapers. However as a parent, it’s even MORE important to pay off the debt, although it might be harder at this point.

I just don’t understand the “advice” on this one. My advice would be going back to Sara who some said was too frugal… Sara is doing it right, pay it ALL off now before you have kids. I didn’t have any consumer debt when the kids came along. The sooner you start paying off the debt, the better positioned you are for the cost of children.

I guess on some level I’ve been lucky, but luck also comes from planning, hard work, and sacrifice.

We take free hand-me-downs from friends and family for clothes – so we basically buy a cute dress here or there, socks, and underwear. That’s it. As for food, they eat what we eat, so we just make a bit more rice or beans or pasta. Medical has been more and so has our life insurance, but we have 20 year term, so we’re talking an extra $50/month for that.

We vacation by car and visit National Parks. Last year, we saved so much money by driving and not flying/renting a car to visit grandma that we were able to hit Disneyland on the way back for 2 days and still spend less money than if we had flown and not done anything fun. My idea of hitting Disneyland is on a budget though. We don’t eat at the park, instead we go off site to McDonalds or back to our hotel off property, and we don’t buy a bunch of stuff or pay to meet the characters.

However, we pay for music and dance lessons, and sports teams for the kids. It’s only because we can afford to do so AFTER we pay our other obligations, including our retirement being fully funded.

Childcare is a financial mistake many people make. I pay for childcare only because my income is high enough that it doesn’t make sense for me to stay home. Most people don’t fall into that category, but still work only to make enough to barely pay the sitter.

I do agree, though, there is no “right” time to have kids. They are a blessing, no doubt. And if you set yourself up with some hard work and foresight before the kiddos come along, you’ll be much better off for it.

I also suffered with infertility, and 4 miscarriages. So I don’t advocate waiting. If you want kids, you never know that you can have them.

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rdzins

( Snowballer says: Most people who I know, who have kids, do it consciously and on a whim because another kid usually means a few more dollars in their pocket.)

Excuse me? More money in my pocket? Who would have that type of mentality, I have 6 kids and your saying my thought is “hey honey I am pregnant here comes the money train!!!!!!!!” Get real!!! You would have to be kidding if you think people actually plan to have kids to get more money!!!! We have fully supported all of our kids, the ignorance of that post was unbelievable. What kind of people do you hang around that have that type of mentality? The tax deduction from a child does NOT = money in the bank.

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JB

I don’t see Cathy’s post as complaining about the cost of children or anything of the sort. The message I’m getting from her post is that for people with children the road to financial freedom may be a little longer than for those without, and not to lose patience while traveling that road. The point she’s making here is that reading blogs and books by personal finance gurus without kids or that don’t take families into consideration can lead a person to think “I’m not doing this very well” or “I’m not getting anywhere”. The fact is, kids are an added expense any way you look at it, and it’s going to take someone with kids longer to reach a financial goal than someone of equal income who does not have children. Patience is the key here, both in parenting and in reaching you financial goals.

Thanks Cathy, and good luck!

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Miranda

Thanks for the great article, I have marked your blog to check out when I have time. I have not been able to relate to JD’s 3rd stage of personal finance and hadn’t really put my finger on why I hadn’t it just hadn’t really clicked with me which is unusal since I typically enjoy his writing, but now after reading your article I can understand why I am not getting it, because I have a long time of raising three kids ahead of me before I am truly ready for the 3rd stage!!

And thanks JD for having a guest article on this subject.

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Heather

Oh, I don’t know… $100 life insurance premium to make sure my children have a trust fund and/or good financial cushion should they lose one or both parents seems worth it to me. We don’t have to spend that much right now because it’s subsidized through my husband’s employer, but we’ve purchased gap insurance in the past. Totally worth it.

And if you think mom’s job is to stay home full-time, great. Just remember that not all of us are like that, and great child care is an essential resource for those of us who want to/need to work. We will pay what it takes. You truly get what you pay for.

What I got from this post was the idea that, wow, yes, I knew having kids would cost a lot, and I thought I was prepared. And then I actually had kids and realized that my preparation wasn’t enough!

I love my kids, not least because I think they’ve helped me move further down the road of financial responsibility. Some people pick up good financial habits easily; other people need good reason to change. No, I’m not as well developed as I should be financially, but you know what? I think I would be worse off without my kids, despite our $1600/mo child care bill. Now we have more reason to care, and it’s made a huge difference for us.

“A hundred years from now it will not matter what my bank account was, the sort of house I lived in, or the kind of car I drove…but the world may be different because I was important in the life of a child.”

Forest E. Witcraft

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Mark

I am almost 42.

We have 5 children.

I have been the sole provider, working in the education sector (read: low salary relative to the rest of the workforce). My wife homeschools our children.

We’ve never carried consumer debt. We had a car loan once (18 years ago) that we paid in full in less than a year.

We paid off our house 2 years ago.

We are building wealth (have been for a while, actually)

It can be done.

I prefer to think of it as “the high blessing of having children.”

🙂

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HaideeL

I am surprised that people here are unable to understand that costs are so different in different parts of the country. The least expensive childcare I could find for my 3 year old is 40/day. It’s a beautiful building with great facilities and the teachers are lovely. Still, I looked a lot before choosing a place because you need to consider how the teachers are paid and what their benefits are — unhappy people don’t make great teachers. You have to be comfortable with where you leave your child. I was very lucky to find such a nice place that’s good to their staff and reasonably priced.
Like anything else, these things are complicated, and everyone makes their own decisions for their own reasons, and that is fine.
I’d still urge a SAHM (or dad) to consider all the costs of having one or two incomes. I saw a post from the SAH side, so wanted to mention the other. Obviously both choices have expenses, including personal satisfaction (I missed working and wanted to return to the workforce), long term savings and contributions to social security — when MY parents split up, my mother had insignificant SS because she’d worked less to take care of us. It can also effect your return to the job market. It can be hard (and certainly is now) to return when you’ve been many years out of the workforce. Fields change, requirements change, and catching up with those is difficult. I love the time I stayed home with my children (3 years), but I really wanted to go back to work and I’m very lucky that I found a job based from my home. I don’t have clothing expenses or commuting, and I’m very available for emergencies. I gain personal job satisfaction and savings for retirement, including contributing to social security (even though I’m always told it won’t be there when it’s time for me to retire).
I’m not going to figure out every cent my children cost me every month, but I can tell you, 200/week for one child adds up fast. My 5 year old costs for full-day kindergarten and care on snow days and holidays. It’s hard to find care for less than that, at least in Central Massachusetts.
I guess I just think everyone needs to remember that everyone is different and location plays a huge role in cost of living, including cost of raising children, even when your kids do play with the cardboard box in the backyard for years in a row.

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Shannon Davis

Most financial advisors say to invest in your 401K before you invest in college savings. Your kids can get college loans based on their future expected income – but you cannot get a loan to retire.

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Camille@TheFinancialWoman.com

As a mother of two teen boys, I love what “weakonomist” said (first comment), and enjoyed Cathy’s post. There are so many factors involved with the expenses of raising children. I did not read all of the posts, but planning can be difficult because many children have special needs with expenses that are often not met with medical insurance, especially if alternative therapies are used.

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Snowballer

Just a note of sad reality…

Most people who I know, who have kids, do it consciously and on a whim because another kid usually means a few more dollars in their pocket. They’ve usually got 2-4 anyway that they spend nothing on (state feeds them, take free stuff from charity), and every new kid is another dependent and corresponding credits for their 1040. They spend so little on their kids it’s always a net economic gain to have another one.

Has nothing to do with most GRS readers life situations I bet (anyone earning more than $30k-ish a year couldn’t get most if any of these free goodies courtesy of the taxpayers) or this post, but that’s how it is out in the real world, and why the people who can’t support them have lots of children.

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Chris Johnson

I was listening to Clark Howard this morning on the Bill Handel show, and laughed when Handel said Clark’s mission was to teach people to live on $12,000 a year…Clark said no, he could live on $8,500 a year! Then he pointed out that his wife and college-attending daughter cost quite a bit more than that, and even the frugal Clark is OK with that–he still manages to save for the future and buy cereal at 80% off retail.

I think the writer’s point here is that we parents weren’t prepared for just how much kids cost. I love mine, and would not be nearly as happy without them, despite their $30,000 annual price tag. The good news is having that extra spending money later–woohoo!

It’d be nice if young couples had a better grasp of how much to budget for having children–they’d probably take on less debt and live more frugally ahead of time instead of trying to make up for lost time later.

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Tyler Karaszewski

This post annoys me with its lack of substance. It’s title is “The High Cost of Having Children”, but its content is essentially, “mine cost $1600/month, that’s a lot!” Yeah, I guess it is a lot. There’s no breakdown at all as to how much any individual item costs, lots of things are left out, and it generally doesn’t provide much insight at all.

You might as well write about “The High Cost of Owning a Home” and then say, “Mine cost $600,000, that’s a lot!” Well, sure it is, but it doesn’t help me at all with planning to purchase one. And that brings up my issue – I’m 27 and recently married and planning on having kids in the near future. Articles on this topic could be so helpful, but they’d have to have some real info in them.

Beyond all that, the author’s expenses are ridiculously high. The average family in the US makes about $40k before taxes, so say no more than $30k after taxes. Given a $1000/month mortgage payment for the same family, that leaves them with $20k. Take another $1600/month out of that and you’re left with a whopping $800 to spend on *everything* else, including transportation, utilities, food, clothes, entertainment, etc to spend for the rest of the *year*. That’s right, $800 left over for the year, not for the month.

Yet, every day I see average families with kids doing OK. You know why this is possible? Because they don’t pay ridiculous childcare, health insurance, and life insurance costs. Certainly I can see why the author would choose to buy these things, but at the same time, I see them as luxuries and not necessities. If I modify that list for my own situation, it looks like this: Childcare: free, this is their mother’s job (quite literally). Healthcare: about $100/month, this is the company health plan premium when moving to a family plan, and it covers an unlimited number of children. Life insurance: I’d pass on this, I don’t think it’s necessary.

So, where the author lists $1600 for those three expenses, I can list $100. That doesn’t make kids sound very expensive to me, but that’s because I’m not targeting the most expensive child-rearing experience possible. To make a car analogy, the author could have said “Man, I love my car, but man is it expensive!” When you find out the author is driving a brand new Mercedes S-Class, you kind of think to yourself, “Well, yeah, of course it’s expensive”, and then you realize that you could probably drive a car for a lot cheaper, but the author didn’t give any clues as to how, so you’re left to figure it out on your own.

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Nancy

I don’t think kids are expensive, and honestly I don’t care. There is no price that can be put on our family life and our boys. It’s just irrelevant. Childless or a house full of kids, it is all about choices and priorities. My best friend is my age (mid-40s) and she and her husband have no kids. Their life is very different from ours. For each of us, our lives make sense.

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partgypsy

I had an abstract feeling of wanting to have kids someday, being slightly workaholic, until 9/11. That’s when I realized that life is short and I would not feel fulfilled going through life without having had a child to share it with. Finances were never a serious argument against it for me, as people told me that children take more time than money, and I knew I was happy to accept hand me downs, etc. So it was an eye opener all the fixed costs that come with raising children, everything from healthy groceries, to doctors and dentist visits, bigger and safer car, life insurance (for yourself, not the kids!) keeping to a stable job with benefits, housing choices (size, school zone etc). We are commited to living simply but it is a whole other ballgame when there are children in the picture. I am not saying this to dissuade anyone, but as a public service announcment, that if it is a goal to have children, like any financial goal one should evaluate and prepare for it both financially and in terms of commitment. For example for the vast majority, one can not have children AND retire early, you have to choose.

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Amber Warren

I am sitting here trying to figure out how it’s a shock to your finances to have children? Maybe it’s my Mormon/LDS beliefs but having a family has always been part of the plan for me. I didn’t get blindsided from my financial goals because we started a family. I’ve always planned for them. I mean, who cares if you don’t have as much $$ as people who don’t have children – your children are priceless!

Plus, I don’t think kids cost that much.

We get a lot of hand-me-down clothing, I buy things at Kid to Kid, we buy everything on sale, I breastfed for the first year, he eats what we eat and I make things from scratch. Health insurance is what it is. And I work so I understand that the price I pay is babysitting costs, but daycare, as a % of what you make, isn’t that high.

I think people put there kids in costly schools and expensive programs to satisfy their own pride. If you help your kids with their studies and teach them at home too, you don’t need expensive schools.

And I paid for my own college – so my kids can pay for a lot of theirs. I think it builds character and makes them responsible to have to work. I started working when i was 16. They can do the same.

Further, let’s think LONG TERM people. If you save a little each month for your kids, they’ll have a great start in college (if you choose to help them with that). We are beginning to save for a church mission and some college for our son, but if you save just $100 a month you’ll have $22,800 by the time they are 19). This will pay for the mission and will help him get started at a college.

My “wealth” and financial situation means next to nothing to me without having a family to share it with. We’re not here to just accumulate a bunch of money and then die. Money is just a means to have the things that really matter: kids and a family.

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rdzins

I hate it when people who have kids and people who don’t have kids fight over it.

Crazy, if you don’t want kids, don’t have any. If you want “experiences” call it what you want it is your personal choice and no one should really judge you for that, so I have to say that I feel for you when it comes to this. I have been to many get together s where all some people talk about are how great there kids are. The truth is I really don’t care how “great” there kids are I am glad that they are happy for their kids.

I am on the flip side of that equation, I have 6 and then people judge me by “how many” kids I have. What is really irritating about the whole thing is that we have always supported our kids, and if we want to have a dozen it shouldn’t really matter to anyone else.

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Kristin

I cannot fathom how you could possibly spend $800/month on two children!! We have two kids as well and our food budget is $250/month. We have no need for childcare since I am a stay-at-home mom. We get free clothes (or they come from granparents) shop at thrift store and garage sales, and they have plenty of toys. We cloth-diaper, too.

I think all couples with kids should take a cold, hard look at their “double-incomes” and add up how much of that extra income is being absorbed through taxes, childcare, transportation, etc. With the resulting figures, most people realize that have two-incomes is not worth it at all.

Also, I think many people need to seperate selfish wants from true needs. A new car and nice house are WANTS (no matter how much you think you “need” or “deserve” it. Food is a need. Be sure you know the difference and manage your money accordingly.

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Alison Wiley

I love children, though we don’t happen to have any (we met each other too late). Children in the developed world are very expensive to the earth’s resources too, incidentally.

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Holly

Reasons to have life insurance for your children:
1). to ensure that they will be able to get it for themselves when they become self-sufficient (unforeseen health problem could prevent qualification).

2). for help paying for a funeral (which we know is expensive).

3). It’s very inexpensive- ours is simply a ‘rider’ on my own life ins.

4). You can purchase a small (cheap) policy that builds cash value and then turn it over to your child when they exit college (that’s what my father did for me).

P.S. I pay WAY more than I would have imagined for my kids (private school) and we are by no means rich. But, like others have stated…we are happy to give up the $$$$ for the XOXO.

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HollyP

I would love to know where some of you people live. I paid $1200 per month for full-time child care per child (thus the reason I have only two kids!), and the good private schools in my area cost $20,000. And don’t even get me started on the cost of old-fashioned summer camps!

In some respects, I have found that sending your kids to *the best* private school or living in the town with *the best* public school system is overrated. I know many successful professionals who attended average public schools and attended state colleges.

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ABCs of Investing

Interesting post.

A couple of points:

1) Your daycare expenses are quite high which is difficult to handle. However, once the kids go to school they will go down significantly.

2) Part of the problem is that it sounds like you had poor finances to begin with before you had kids. While I certainly don’t think you should have delayed having kids I don’t think it’s fair to blame them for your finances. Yes, they do cost money but it sounds like that non-mortgage debt was there before they were.

The important thing is that you sound like you are on the right track to improving your finances which – kids or no kids – is the main thing!

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parksandwilson

I definitely think that all manner of planning should come into play when starting a family. I’m 22 years old and my wife and i just had our first child, and it would have been great if we would have planned a little better. No one really told us the real cost of having a kid, so we were a bit naive in thinking everything would be fin. so now because of crappy insurance im stuck with almost $10k in medical bills, plus my credit card debt im trying to pay off, and im starting college for the first time in april. lets just say my financial outlook at this point is looking a little bleak. my advice to anyone thinking of having a kid? PLAN SAVE PLAN SAVE PLAN SAVE! also, invest in decent insurance with a low deductible.

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La BellaDonna

“Or are you going to appreciate the children and grandchildren that are taking care of you in your final moments?”

Colin, I would suggest that whatever motivates people to have children, that they NOT rely upon their children and grandchildren taking care of them in their final moments. It’s wonderful when they do and can, but the miserable reality, seen every day in nursing homes, is that many either are not able to do so – or do not want to do so. By all means, have them, love them, enjoy them – but save for retirement and buy a catastrophic insurance policy, or whatever is necessary to pay for your care. Don’t plan on your children, who may be raising their OWN children, and have neither money, time, nor the ability, to take care of all your needs.

I thought Cathy’s post was a simple reflection, and quite honest. It’s nowhere near as incendiary as the posts that can be found at violentacres.com on the costs and responsibilities involved in taking care of children. Children don’t live on air; it’s that simple. But there are a lot of people who could benefit from reading Cathy’s post. The people who come here are those who are at least trying to be fiscally responsible. It’s disingenuous to suggest that they not take into consideration the financial impact of the biggest decision they can make in their lives: whether or not to have children. Suggesting that people prepare – or even calculate whether they can afford to do so – is not monstrous, and doesn’t mean that the people who do so are child-haters. I would even advocate more strongly that the people who want children plan to live on one salary – not because all families will have a stay-at-home parent, but because, sadly, many families will not remain intact, and of those families, the number of parents who become single-heads-of-households is astronomical. Morever, the majority of those single heads-of-households are women. If families are already used to living on one salary, at least the fiscal change in their circumstances won’t be so violent.

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Lara

Transportation can be inexpensive (take the bus, walk) moderate (reliable used Camry) or very expensive (Ferrari). Housing can be inexpensive, moderate, or expensive. Food costs can be high, low, or in between. Like any other aspect of our lives, children cause the need for financial decisions and trade offs. The minimum costs include nutritious food, medical and dental care, a car seat, diapers, a few school supplies, some life insurance (for yourself), someone to care for your child when you cannot, and whatever critical items of clothing you can’t get via hand-me-downs. Unless you have a child with severe medical problems, most of this can be obtained fairly inexpensively.
The issue is most parents feel they should provide more than just the basic necessities for their children. Braces, swimming lessons, birthday parties, trips to the zoo, bicycles, college – these are all good things for which many parents will sacrifice other desires.

My family’s most current dilemma involves school as our oldest child is now kindergarten age. We can send her to our adequate, but not exceptional, public school for free. Or we can pay to send her to a fantastic private school. After figuring in tuition costs, lack of free busing, and fewer free extracurricular activities, I figure the private school will cost us $4000 per year per child. If the public school was horrid or if the private school was $20,000 per year, my choice would be easy. As it is, I have to decide if providing a better learning environment for my children is more valuable than applying extra money toward my mortgage principal. I want my child to receive a good education, but I would also love to be debt free.

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I Was Broke. Now I’m Not.

Thanks so much for putting this into perspective. It is easy as a parent to get discouraged comparing your finances to the finances of someone who doesn’t have kids, and the priorities ARE MOST DEFINITELY DIFFERENT than they are for someone with no kids. This post is a great reminder that we have to keep the fact we have children in perspective.

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Troy

Kids are not expensive!

They CAN be, but that is usually because of the choices of the parent as opposed to the child itself.

Rich people have kids. Poor people have kids.

Kids cost what you are willing to spend.

$10 per month or $100,000 per month. Just like anything else really.

This notion that children are somehow mandatorily expensive is ridiculous. They are not.

So, JD, listen to Trent on this, because he is correct.

Also, regarding the financial implication of children, I do agree that having children slows ones wealth building activities. Not because it has to (force), but because you want to (choice).

The biggest change I saw when I had my first child was the simple fact that my life was no longer about me. For the first time ever, someone else was more important. Until you have kids, I don’t think you ever get that – at least I didn’t.

So pre-kid you are free to focus on your prioroties, including wealth building.

Kids roll it, and things change. Your priorities take a back seat, and their priorities come front and center.

That is the gift of children. They make you realize you aren’t that important. They are.

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Kevin

$800 a month on each kid? I doubt I spend that much in one year on our son. We do get free child care twice a week at the wife’s preschool but other than that I don’t think we’re extremely cheap about anything. We even buy nearly all organic food. We have relatives we share clothes and toys with, which helps.

Why have life insurance on the kids? Are they providing income you would miss if God-forbid something happened to them?

We’re debt free except our mortgage. We save about 25-40% of our monthly gross depending on the month. We made a conscious decision to live on less and have the wife work part-time. Just want to put that out there for those of you that think it can’t be done.

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John

I’m a new reader to the grs site. Like a lot of commenters, I’d say if you don’t have someone to help share your wealth with, who cares how much money you have. My wife and I fortunate to have good jobs and a son, with another on the way. If someone were to ever ask me what the best investment I ever made was, I’d gladly tell them it was the $15 stuffed animal I bought my son two years ago that he takes with him everywhere he goes.

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Kevin

@Colin (#12)
“Are you going to remember that Alaskan cruise you took?”

Uh, yeah, actually, that’s the plan. I hope to have a long, fulfilling life full of rich experiences and memories with my loving wife.

“Or are you going to appreciate the children and grandchildren that are taking care of you in your final moments?”

Would I rather die with happy memories of being independent and traveling the world with my wife, or would I rather die knowing I was a burden to my family right up to the very end? Is that seriously what you’re asking? This has got to be a trick question.

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Moneyblogga

I completely agree with comment #1 by the weakonomist. I have made huge sacrifices for my children but I take it in stride and feel very blessed with their presence in my life. If I had it to do all over again, I would not change a thing.

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Jon

Seriously? $800/month per child? I’ve got two kids I we spend $200-$300/month for them combined. Kids don’t have to be expensive.

Also, you should come what you make to what you on the kids. A few years ago MSNBC did a piece on who families with two working parents actually lose money. The money gained by a mother working outside the home in nearly all cases does not offset the cost of more professional clothing, child-care, more prepared foods, increased transportation costs etc.

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rdzins

I have alot of kids, (6 of them) they are required to help around the house and with family chores, it is part of being in a family. I find this generation is not taught to work hard and help others which I think is sad. So many families are so busy running to structured activities, rotating around schedules and what the neighbors are doing.

I never have a dull moment in my house and it seems like I always have a few “extra” kids.

I find the costs are not as high as the authors but that could be because of maybe were I live. We have disability and life insurance, (which I didn’t put a whole lot of thought in to till after I had kids) Childcare is expensive, but I have found you can price around for some things, and some things are not worth pricing around for.

I find ways to save alot of money when it comes to clothing and feeding my family, I would say that I probably feed and clothe my kids for less than what many spend on one or two of there kids. My kids do not have or get the latest and greatest toys but there sure have more toys and “stuff” than I had growing up. And I don’t believe I was deprived.

I am able to save and pay debt down and having kids around had made me more aware of my spending. I guess you could say it has forced me to be more mind full of my money.

Are kids expensive, of course they can be. I provide food, shelter, clothing and a good environment for my kids, which I feel is a necessity, everyone has different ideas of what kids “need”. My kids provide themselves with there own vehicle and vehicle insurance if they see it a necessity to drive, which teaches them that everything has a cost to it. I will help them with schooling but I refuse to pay for all of it, I had to pay for my own, many arguments can be made over this but I feel a child that has to pay for a portion of there education will value it more, it should never be an expectation.

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J.D.

@The Geeks in #43 and #45
Kris and I do the same thing — sort of. When I did our taxes by hand, I always did them “married-joint” and “married-separate”. For the past few years, my accountant has done them for me, and it’s now a reflex for him to just work up both scenarios. (Which for him, I think, just means some toggle button in his computer program.) I like seeing how things break out. Plus, that’s how we used to divide our tax refund when we got one! 🙂

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Shara

@ Linear Girl

I do the same thing. I do our taxes, and then again as if we WEREN’T married. I should have divorced him a while ago ;).

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Meredith from Merchant Ships

I love Cathy’s blog and have been a loyal reader for years. She strikes me as a careful spender who lives well within her means and below most of her peers.

That’s why I’m so surprised to read that her kids cost $800 a month. Wow! I don’t pay anywhere near that much for mine, and I’d say at this point, we have a similar quality of life.

I think the key difference here is that Cathy and her family choose to live in a much more expensive part of the country. Though her kids *cost* more in daily care, she also *earns* much more as a professional mom than I do.

We’re also not saving as much for their educations as we are to pay off our mortgage within the next five years (our only debt).

Point being, kids do cost–but it’s really the choices you make about how you will live as a family that determine those costs, not the children themselves.

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Linear Girl

I’d be interested to know how much that $1,600 per month actually costs you. Since it’s tax time, the tax benefits the IRS gives for children are foremost in my mind when I read an article like this.

As an example, I’ll assume that you and your husband are in the 25% bracket (using the marginal rate to keep it simple, this is very informal). Your $1,600/mo equates to $19,200/year. Off the top of my head:

Personal deductions for each child is $3,500. This translates to $875 per child (3500*0.25), total savings $1,750.
Child tax credit of $1,000 per child translates to total savings $2,000.

With these two items we’ve identified $3,750 in tax savings. There are other items that are harder to put a number on, but can save significant money. Two that come to mind are:

Child and dependent care credit – I can’t estimate because I don’t know what portion of your expense goes here.
Medical deductions, if you itemize, for the increased health insurance. Can’t give a number because it has too many variables.

I admit I’m a geek for this kind of math. I always do my boyfriend’s and my taxes twice – once for real and once as if we were married. Most years we’d save a bundle if we were married, in a few we would have paid a little more. I’m not the marrying kind so it’s just an exercise, but I think it’s valuable info to have because it gives me another perspective on my choices and my government’s values. In your case, if you did your taxes a second time as if you had no children, you could see how much of your out-of-pocket expense actually comes from your own pockets.

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Shara

I think Beth @30 hit it on the head. One thing I’ve noticed with people having kids is that they can be a huge sink for waste. In other words there are so many more decisions of what to buy that many people who make good decisions elsewhere make bad decisions spending on their kids and wind up holding themselves back financially.

A HUGE part of this is the peers you surround your children with. Currently DH and I are struggling with where to move when we leave our house. We know we will leave before our oldest reaches junior high because the schools are bad, but the best schools have the most materialistic kids that we don’t want our kids to emulate. We don’t want our kids laughed at because they dress *poor*, but we won’t spend the money to make them like their spoiled classmates.

Ultimately I think many American parents need to get over their own guilt. It’s natural to feel guilty when you can’t give your child everything he/she wants, but often that’s best for them and character building, as well as what is best for your pocket book. It’s amazing how resilient the human spirit is, and the lessons you can learn around every corner, even if we have to share a bedroom with a sibling and don’t wear designer duds or have a Wii.

Kids are expensive, but not as expensive as many of us make them.

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SeekingLemonade

Explosive topic!

All I can say is my father is 89 and dying of lung cancer. He had three children, my two sisters and I. I feel the tug of relationship despite my living three thousand miles away.

I have no children. Aside from my wife, I wonder who will feel that tug of relationship when my times gets near?

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Carmen

Also, just want to say regarding tmk’s comment. I don’t think I would have started managing the money if it weren’t for the kids. So, if they “cost” so much, there existence has prompted all my saving instead of wasting. So, I think I’ll make out in the end…

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Roger – A Content Life

Having a family in the United States is very expensive, but it’s also been money well spent for me. I’m happier for having children.

Health and education really does cost more that it should in the United States. I’m spending a total of $200,000 for college educating my two sons. All of society benefits from the creation of new, healthy, educated citizens. I don’t think society should have to pay all the burdens. But other countries with nationalized health care and low cost college education are paying for their fair share of creating new citizens.

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HollyP

Great to see a different perspective.

I too find the prospect of paying for college has significantly slowed down my progress towards FI. OTOH, there will be two competent, well-educated women to find me a good nursing home when that day comes. 😉

One analysis I’d love to see here (or elsewhere) is a lifetime comparison of the costs of being a SAH parent versus a working-outside-the-home parent. Taking ten or more years out of the workforce can have a tremendous impact on financial security later in life.

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Denise

I liked Cathy’s post and to me her point was that it can take longer to get thru that third stage when you have others who rely on your finances.

I’ve been feeling frustrated that our financial goals seem to be moving slowly, but when I stop and realize why it’s usually something to do with my kids or my aging parents or a friend in need….we were going great in February and then hit an illness with my daughter, a death in a friend’s family, and some issues with my parents….all things out of our control (and yes, most of the expenses come out of our emergency fund, but then we have to take time to rebuild the fund).

Life happens for everyone, but the more people in your family/friends the more chances of “life” and emergencies happening.

Thanks Cathy for your point of view!

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Carmen

Wow! Your kids are a bargain. We pay over $2500/month – and that’s just day care/pre-school for three! Maybe it is just the part of the country we live in. Add in food, clothing, college savings, sports, health insurance and doctor co-pays and I would estimate our 3 kids cost us about $4500/month.

I can’t agree more with the sentiment of this post. If only I had managed my money better BEFORE I had kids, it would have prepared me much better for these expensive times.

But, as others have stated, it is totally worth the cost to me. The joy of their life is priceless.

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CindyC

When we first had our child, I couldn’t understand all the hoopla about how much they cost. So we buy some extra clothes and food — big whoop — but now I see the situation much clearer. Having children means someone needs to take care of them. That is usually the first five years if they will be going to public school. So either you are paying for someone else to care for them or you are doing it yourself.

I know some parents can give up one job, make some adjustments, and their lifestyle doesn’t change much. However, that wasn’t true for us. Going down to one income meant we had to dig into our savings until we could cut expenses (it’s hard to go cold turkey).

Talk about expensive and now we’ve decided to homeschool. Homeschooling meant that our earning potential would be greatly reduced in the short term.

But to spend more time with our child every day is definitely worth it.

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TheOzz

All I can say is that there are plenty more views on parenting and finances than this one.

I am much richer as a result of having kids. 😉

If your only gauge of riches is a money stick then your definition of rich will be limited.

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HaideeL

I was glad to see this post. We have two kids (3 and 5), and I would not give them up for anything. That said, staying home with them for 3 years put a big dent in finances. Now that I am back at work and paying for childcare — it’s very expensive and you can’t write all of your childcare off — it depends on income. The cost of childcare also depends location. Those who are lucky enough to have family that can help out with childcare have a great gift… make the most of it. We simply don’t have that option.

Now I’m trying to figure out how to eliminate debt and save more for retirement, I’m stressed and scared and not sure where to start. I like this blog but the fact that JD doesn’t have kids makes a difference. I’m glad to see the costs of having children acknowledged.

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Matthew144

1. There is no better thing to spend your money on than your kids. They are the ultimate luxury good.

2. Kids like anything in life worth anything are hard work. If you don’t work hard, or if you work dumb, they become brats and a scourge on your existance.

3. When you are old and in a nursing home, your money won’t come to visit you and it won’t look out for your best interest.

What children don’t need is parents working ridiculous hours to afford this “stuff”. They need their parents to spend time with them, to care about their progress in school, to discipline them, to teach them good moral values, and to teach them life skills — like balancing a check book, budgeting, cleaning the house and cooking decent meals.

If your kids have to do without the “stuff” they want that’s even better because they are learning about money management and learning to set priorities and wait for what they want.

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Michele

I am 41, am married, have 3 kids and am well in JD’s “third stage.” I don’t think having kids, or having a spouse, or going to a private college, or having a sick parent should be the blame of what stage a person is in. If people start their financial planning early, taking into consideration their lifestyle and goals, they should be able to meet them. I mean unless suddenly someone has sextuplets that they weren’t planning or a spouse suddenly gets very ill, most of the decisions we make are not made hastily and should be part of the financial plan. I knew I was going to have children and wanted to stay home with them. My husband and I saved for that to be a reality. We’ve never been in debt and have saved a good deal for retirement. The fact that we have kids doesn’t change that.

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Stefan

JD, I read your blog because you don’t have children. It’s certainly interesting to see someone else’s take on them, but we’re not planning on having any so it’s hard to care a lot.

I agree that it doesn’t seem reasonable to wait to have kids for personal finance reasons, but I strongly encouraging anyone thinking about having kids to really consider adoption, and to read over some of the critical reasoning at vhemt.org detailing why it’s not so great an idea socially to keep pumping out kids, especially when there are so many that need better care than they can ever hope to receive at present.

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The Personal Finance Playbook

My wife and I plan on having children, but wrestle with two questions (1) when? and (2) how many?

We have plenty of time, but she wants to have children sooner rather than later. She’s a doctor (as of May, 2009) and she would really like to have any and all the children she’ll have before she turns 35 – because of the well documented health risks. On the other hand, she’d like to finish residency and perhaps a fellowship before having kids. That will give us a small window for having kids – especially multiple kids. It’s something that we currently discuss almost daily.

Cathy – I enjoyed the post. It’s just your thoughts, and that’s probably blogging at its purest. Don’t let the naysayers bring you down. You’ll never please everyone in an audience as big as GRS’s.

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Neal Frankle

My wealth is my family.

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AD

I think some of the other commenters read too much into her post. Her point was that it can be hard to look at where someone like J.D. is at in his finances and compare them to her own. She knows she’ll get there more slowly than he; she’s okay with it because she gets so much from being a parent.

As a 27-(okay, okay, 20 days from being a 28-year old woman), I think it’s a good reminder of yet another benefit to my husband and I working so hard to pay our non-mortgage debt last year. And the possiblility of children is another reason for us to have a healthy savings.

Of course no one should wait to have kids until everything is perfect, because that day will never come. But I’m not ready for children just yet. I feel like we are in a great position to do all of the right things for the next couple of years to prepare ourselves financially, and maybe give ourselves the option for me to be a SAHM or maybe freelance from home.

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Cathy @ Chief Family Officer

@Kita – That’s definitely the standard financial advice, and yes, I’d say that there’s an emotional component to it as well. However, I do prioritize retirement over college savings – it’s just that once the “minimum” retirement savings have been achieved, then it becomes a balancing act for me. It doesn’t feel right to me to throw ALL of our savings into retirement and save nothing for college.

@Kate – Like Jason (#17) said, there is no good time to have a kid. And as a woman who had two miscarriages and took them very badly, I’ll say that if you want kids and then experience infertility, it can be emotionally devastating. So if you’re financially responsible, even if it’s not the *ideal* time to have kids, you may not want to put it off. The emotional impact of infertility is incalculable. I’m not trying to be hypocritical – like J.D. said, there is no clear cut answer to any of this!

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Gerry

Interesting post. Here’s my situation, yours may differ…
My wife and I have 3 kids (age 5 and under). We started having kids when we had some debt plus the mortgage. We dropped to one income with the arrival of the first baby, and continue to this day on one income. It’s a professional grade salary, but certainly “south” of $100K. Today, we are debt free except the mortgage, have a 6 month emergency fund, making accelerated payments on the mortgage, and saving 15% in our 401K. And there is some money left over to save for the kids college, replacement vehicles, etc. After that, there is not much extra, so we’re not going on cruises or such. I suspect the “cost of kids” will rise as they get older (extracurricular activities and “stuff”). But all in all, I feel we are doing quite well. But that’s just us.

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Kate F.

I liked this post as well. I read it as just a reaction to J.D.’s post about the third stage and not meant to be a deep analysis of the impact of children on finances.

I also found it helpful to keep in mind the impact that additional costs due to changes in lifestyle can have on debt elimination. I was recently told my my doctor “You’re eggs are getting old – if you want kids you should have them soon.” Not only was it somewhat rude of her, but she didn’t take the time to find out our life situation first. While I understand that it will always feel like there’s not enough money to have a child, I also don’t think that it would be right to bring a child into a home already saddled with a lot of debt. How could I start to save for their college education when I’m still paying for my own?

All to say – I found the post interesting and Cathy refreshingly honest.

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Lakita

I enjoyed the article and the fact that it wasn’t “black and white”. All costs can’t be calucated with numbers.

Question for Cathy — The standard financial advice seems to be to save for your retirement before you save for college. I noticed you are balancing both. Financially is this a wise decision? Is there an emotional element that financial planners aren’t calculating?

I am single with no kids, so I don’t know what I would do if I were in your position.

Kita

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SandyFS

I agree with sandy, kids get more expensive as they age. I did the same things, was very frugal when they were young and thought I was pretty smart. But life happens, and with kids a lot happens that you cannot control. My two are in their 20’s now and out on their own, and we are trying to pay down debts from helping one through college as well as paying off an equity loan for years of medical expenses for the other. And in this economy sometimes they still need our help! If they ask to borrow money now, it’s not to buy a comic book, it’s to make rent or some other major bill. As everyone else has said, I love them to death and wouldn’t trade them for the world–but there’s no getting around the fact that becoming a parent is a serious lifestyle choice, not just a temporary expense. I definitely didn’t anticipate the full impact in the beginning!

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Baker @ ManVsDebt

Wow, a this was a great perspective on the issue. Our first daughter is turning a year-old soon and shes a blast. My wife and I have decided to completely eliminate our consumer debt, before having our second which should only take a year or two. Hopefully, working towards financial independence will allow us to comfortably have many, many more.

How people view the relationship between finances and money is always fascinating to me.

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J.D.

I don’t know. I found this piece refreshing.

It seems to me that whenever I read articles about children, they’re usually pretty black-and-white. Trent’s articles seem to conclude that kids don’t cost much at all (which goes against the studies I see everywhere else). Others conclude that kids are definitely worth it and no amount of money could make them not worth it. (To be fair, that’s basically what Cathy is saying, too.) From the other side, you sometimes see articles saying that kids cannot be worth it because of the financial and environmental costs.

I don’t think Cathy’s article pretends to be anything besides a meditation on the subject. It’s not trying to be deep or heavy. But I think that its biggest strength is that she’s honest. She’s wrestling with this question, and admitting that it’s not as clear-cut as people try to make it out to be. Obviously, she loves her children and would not change things at all, but she admits that having them requires a compromise on her part. She’s sacrificed one future for another.

What can I say? I like it! 🙂

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Jocelyn

I like what weakonomist says to sum up Cathy’s post:

You could say that having kids really hinders one’s ability to to amass wealth, but others might say having kids redefines what it is to be wealthy.

I would also say that when thinking about having kids, it’s helpful to envision it as a lifestyle change, rather than as an ongoing monthly cost, or like having an extra large appliance in the house. It impacts much more than just your finances, but finances are one of the indicators that it’s creating a huge adjustment in your life.

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Jason

@Aaron — The life insurance she is talking about is likely for her and her husband. My wife and I have recently upped our amounts to be able to cover paying off the house, in addition to paying for two college educations. When it was only the two of us, the insurance amount was considerably lower, since we didn’t have the college education, mortgage, etc.

Overall, though, I thought this was a pretty lightweight piece. Trent over at The Simple Dollar did a much more detailed analysis (although it, too, had flaws) about the financial implications of having children.

I will concur that I find advice from someone who is dealing with children and personal finance to be more interesting to me. Children add a lot to one’s life, both joys and challenges. If my wife and I had wisened up about personal finance a while ago, we would be in a different spot now — but we didn’t, and the kids are definitely a constraint in eliminating debt that you can’t sell off, give away or otherwise eliminate.

My advice to perspective parents would be to try and pay down as much debt as possible. Ideally you will know if you want kids when you get married, and also you should likely have a plan for what’s going to happen when the kids come. If you want to have Mom stay home, then start living like it — and use her income for paying off debt, racking up savings, etc. If you are doing daycare, find out what that costs and either use it to pay down debt or put it in savings. The worst thing to do is to start living on two incomes and get used to it, amassing debt, car loans, etc. Then when the baby comes, you already know you can handle it.

All that said, there really is truly no good time to have a kid. There are always things you want to do “one last time”, or you want to complete a degree, pay down debt, buy a car — but you are working against biology, and biology can be unreliable, so you likely need to work backwards from when you want to have the LAST kid and figure out when you need to have the first one. This may not align well with reality, but at least it’s a starting point. I guess kids are a decent reminder that you can’t have it all 🙂

And before the “I don’t like the breeders” people show up (they often do), I will say that having children was a very conscious choice on my behalf, and I do not try and impose the belief that everyone should have kids, or bring my kids out to fancy restaruants, etc. It wasn’t a *rational* choice by any means. But if we did everything rationally, the human race would have died out long ago.

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tmk

Having kids is as expensive as you want it to be. If you want to work to pay for their daycare then thats an extra expense. The extra health insurance is as big an expense as the plan you choose. I believe that kids are wonderful and have no extra impact on our savings plans. The money I spend on them was spent on junk (clothes and stuff) before I had them. If anything kids are making me more financially responsible.

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John

It can be tough for families to pay off debt before they have kids, especially if they have a lot. For older couples, you are racing against the biological clock when it comes to having kids. Sure you can have them when you are older, but there is a greater risk of complications and other issues.

My wife and I have some debt, but we decided to go ahead and have a child. After two years of raising my son, I am so glad we did! Nothing beats the fulfillment of raising a child.

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sandy

I remember when I was pregnant 16 years ago with our first…it really jumpstarted my concerns with getting our house in order financially. Thankfully, I had read The Tightwad Gazette before we bought our house, and that was a gem when it came to raising kids on a budget. I followed many of her tips and was able to be a SAHM because of choices that we made (small but comfy house, cook from scratch, etc…)
The COL did take a hit when she was born, but it didn’t hurt quite so bad, as I anticipated buying thrift clothes and furniture for her. I saved many of her things, and when we had our second daughter, I didn’t need to spend as much for her (that was a savings!). They were 5 years apart.
Maybe that’s the ticket…have them years apart and then by getting used to the outflow, by the time #2 comes along, you barely notice an increase!
Kind of like just one car payment at a time…
My oldest is 15 1/2 and the checks you write when they are little are nothing to the checks you start writing when they are this age! Save while they are little and don’t care about stuff yet!
She’s come home from school with the “opportunity” through school to go here and there with various clubs and organizations…these run from $ 129 to $999 for a trip of just a couple days…plus driver’s ed ($329), plus summer camp, plus, plus, plus…start saving while they are young!

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EscapeVelocity

The flip side is that when you’re elderly, if you have kids, you’re more likely to have someone you can trust to manage your financial affairs should you become unable to, and check up on you and do minor household maintenance so you can stay in your home rather than moving to a pricey retirement community. Doesn’t always work out, obviously–sometimes they wind up hating you, or move to Peru–but I’d say it’s still the norm.

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Colin

Wow, Cathy, I’m sorry, but you need to take a step back and take a look at your life. What are you going to remember when you are in the final days of your life? Are you going to remember that Alaskan cruise you took? Or are you going to appreciate the children and grandchildren that are taking care of you in your final moments?

My wife is a nurse and almost every week someone passes on. The ones with the most children are the most peaceful. The ones without or with children who don’t care about them, are always the most regretful.

There is so much more to life that amassing piles of money to be “safe”.

I have a passion for financial planning, but I will not let that get in the way of what life is truly about.

We need a post about the “High Cost of Not Having Children”. I think it would open your eyes Cathy.

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futuredrmd

I often hear this from parents- the end of life pay off due to having children. It is a bit absurd on some levels. NO time to address them all since I would clearly have to start at base one given your ideals, but simply put: what about the parents who have adult children that do not have the time, energy, or desire to have anything to do with them? The patients that I see ‘dying alone’ which keep in mind, everyone does, are the ones who have children that are either estranged, or too busy with their own families to make time. A colleague of mine has a parent on hospice and due to pass any day, we have to basically kick him out of the door every evening to make him leave the facility, and he has refused fmla. He is the only child that lives in town. He has commented over and over that there is no need for him to be there. So I find it sad, and delusional when this is the principal reason for those with children to justify their familial choices, or attempt to fill those without children with the same fear that drove their decision. It is a bit scary when this is the main justification for starting a family…it is not valid nor guaranteed, and you would think there are other less selfish perks. Parents who subscribe to this ideal strike me as people who are lonely, and feel that anything is better than their loneliness.

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Cathy @ Chief Family Officer

@Aaron – That’s not life insurance on the kids, that’s life insurance on my husband and myself that we have to take care of the kids in the event something happens to one of us. And yes, it’s a lot. Visit my blog and learn something about me before you judge me though 🙂

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Cathy @ Chief Family Officer

@Weakonomist – Thanks! (And thanks to J.D. for the great editing.)

@Jimbo – I’m not lamenting having kids, but rather my lack of preparation for the impact they have had on my finances. I wouldn’t have delayed having them (I had two miscarriages, I would never recommend anyone delay having kids just for financial reasons!), BUT I wish I would have focused even more on living frugally and saving as much money as possible.

Of course my children are a priceless gift. But the point of this post is that having kids has a huge impact on finances – to say otherwise is simply wishful thinking.

@Marcy – Thanks! You make an interesting point, especially as I don’t expect (or foresee) any outside financial help. I do think it’s important to be financially independent whether or not you have children, though.

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Eric

I don’t really get the point of this post.

Is the author suggesting paying off debt before having children? Is she just complaining that they are expensive? It sounds like she is simultaneously upset with the impact of children on her finances and talking about how great it is to have kids.

Overall, I think this is a topic that I would like to see discussed but perhaps with a clearer thesis and more depth. I didn’t get anything out of reading this article. My first child is due in May and I would love to hear more about what to expect financially.

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Britt

Thanks for the insight. I have to say, being a parent myself, that there ARE things you don’t think about before you have kids that you have to pay for. I don’t agree with the attitude of your post however. Everyone is happy to have kids, at least any good parent is. But to say they’re the reason you can’t make headway with your financial goals is where I find issue. I don’t completely agree with “Rich Dad, Poor Dad”, I think some of it is a bit “iffy”. I do, however, think it has some solid financial tips. To paraphrase one of my favorite scenarios, poor dad would say “the reason I’m poor is because I have you kids”(sounds a lot like your post) and the rich dad would say “the reason I must be rich is because I have you kids”. Whether or not that’s a true scenario, the lesson is the same – its a matter of perspective.
I agree with Chett though, I do think you’re giving a “be prepared” caution to all who aren’t parents, to get their finances in order before hand.
Great post, even if I disagree with some of it. Thanks

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Jason

For me, it comes down to what money and wealth is for. We all tend to focus on how to build the biggest pile of money, but what good is it if you have no joy in your life?

My measure of success in my life is not how much money is in my bank account, how big my house is (or how soon it is paid off), or what kind of car I drive. My family is WHY I work and WHY I’m financially responsible. Would it be easier to save and pay off debt without a family? Of course, but what is the point?

It’s cheaper to go without a boyfriend/girlfriend or a spouse, but who wants to go through life alone?

I feel strongly about holding off on purchases until it’s financially responsible, but kids are my sole exception to this policy. There are a few clear instances when kids would break the bank, but it kills me when people keep waiting for “the time to be right” to have kids. There is no better motivation for savings! Kids are a blessing in every sense of the word. Given the choice, I would live in a cardboard box with a million in credit card debt before I would give up one day with my kids.

I look forward to getting rich slowly, but I’m more than willing to accept my course being a little *slower* than those without kids. Wealth is measured in happiness, not dollars and cents.

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Cloppy

Sounds like your purpose in life is your kids. You’d prefer being a debt-slave rather giving up your kids. What if they suddenly died out of bad luck (plane crash, etc) ? All that emotional investment for nothing. You should really learn to be strong enough to survive such a thing if it ever happens. How shallow and purposeless your life would be if they died prematurely ? Do you really want to feel such a thing ? Life isn’t about a purpose, there is not a single purpose, as your purpose can change in a second from a day to another in your case.

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Chett

@Jimbo,

I thought the post made perfect sense. Kids cost a lot of money, and that should be considered as you plan a family.

The second part of her discussion contends that even though the price of having children is high it is well worth it.

Maybe the intent was to allow people who are thinking about starting a family, to consider where they are financially before they begin a family.

I think you should get a pet yourself, grumble at it in the morning and leave it off the blog if that’s the only reason you drop in.

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Aaron

Even within the “I have kids” group of people, costs vary widely. I have 3 kids under 6 years old and was blown away by how much the author was spending on her two kids. Having kids doesn’t automatically mean a life of financial poverty (but it does automatically mean a life rich with love!)

And one question. Whats the reason for having life insurance on children?

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Melissa

If I told others one of the drivers to never have children was financial concerns, I’d probably be labeled Ebenezer Scrooge. Seriously though, with the rising cost of education (and virtually everything else) these days, why not?

My parents had one child (just me!) because they didn’t want to bite off more than they could chew at the time as they both worked and couldn’t afford to drop to one salary. I knew this for the most part growing up and that never gave me a complex or made them seem cruel…just very realistic and practical.

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Marcy

Great post. I too have noticed that many of the most acclaimed PF bloggers out there who post their financial specs monthly are childless. It is great for them to have a comfortable lifestyle, and many people decide not to have kids for a variety of good reasons. However, it is rather frustrating for those who have or plan to have children, because the laudable financial plans of these PF bloggers are not at all realistic for those with kids. To top it off, parents are often represented as irresponsible/spoiled/the relative charity cases in the families of these bloggers while the kidless are depicted as the hard-working martyrs. (I haven’t seen this on J.D.’s blog but on several others). I think this is very wrong.

I also wonder if this is an effect of the overly independent-mindedness of western culture, especially in the U.S. In most other group-oriented cultures money is spread around inside families to help give each other a leg up when they need it. Families with kids are helped accordingly, and they aren’t seen as being selfish/bad people/failures because they can’t do it all on their own. Something to consider.

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Jimbo

Sorry to say but this post makes no sense – you lament about the amount you have to spend on your children while constantly pointing out that you don’t regret having children. And I know certain comenters will come along and start comparing having kids to having pets and this whole discussion will deteriorate from there.

My bottom line = kids are an enormous gift (just ask the couples that can’t have children how much money they would give to have children) – they should be loved and one should not be remotely remorseful about the money spent on them. If this is how one feels, then one should not have kids. Just my $.02.

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the weakonomist

You could say that having kids really hinders one’s ability to to amass wealth, but others might say having kids redefines what it is to be wealthy.

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